Fatuosity, an archaic term for idiocy, is such a marvelous word it needs rejuvenation in our modern era of buffoon economists, smirking corporate charlatans, and giggling business journalists. While the globe is spinning down from recession to depression to doom, our ears are ringing with daily announcements of turnarounds by people who find it difficult to match their socks in the morning. We had it all before in the early 1930s, but hardly anyone who was alive then is alive today to remember it.
When the Great Crash occurred, Harvard University had its Harvard Economics Society, a collection of Harvard pundits who published a weekly sheet to make their wisdom available to the locals in Harvard Yard, to Wall Street, and to the world at large.
Wisdom, indeed. The Great Crash began in October, 1929, and lasted more than 10 years until the intensive government-sponsored production of World War II pulled us out of it. Here are some comments from the Weekly Letter of the Harvard Economics Society in the weeks and months that followed the beginning of the misery of hard times.
"A severe depression like that of 1920-1921 is outside the range of possibility." -- November 16, 1929.
"With the underlying conditions sound, we believe that the recession in general business will be checked shortly and that improvement will set in during the spring months." -- January 18, 1930.
"General prices are now at bottom and will shortly improve." -- May 17, 1930.
"Since our monetary and credit structure is not only sound but unusually strong ... there is every prospect that the recovery which we have been expecting will not be long delayed." -- August 30, 1930.
"Recovery will soon be evident." -- September 20, 1930.
"The outlook is for the end of the decline in business during the early part of 1931, and steady ... revival for the remainder of the year." -- November 15, 1930.
Of course, they were not alone. The President of the United States, Herbert Hoover, continually touted for his brain power as a former engineer, was himself delusional. Hoover's words: "While the crash only took place six months ago, I am convinced we have now passed through the worst and with continued unity of effort we shall rapidly recover." And in June 1930 he beamed at a delegation requesting a public works program to help speed the recovery: "Gentlemen, you have come sixty days too late. The depression is over."
As for the corporate charlatans, they came out of the woodwork large and small to pontificate:
"These really are good times, but only a few know it." -- Henry Ford, President of the Ford Motor Company, in a statement in 1931.
"I don't know anything about any depression." -- J. P. Morgan, banker and financier, in a statement in 1931.
The central problem is that the people who claim to know enough to guide the public are too often either witless or self-aggrandizing con artists. Economics is far from a science, and economic theory is too often based on ridiculous assumptions about human behavior. Corporate chiefs are far from super-intelligent, and they are too often in place because of sociopathic values. As for business journalists, some are and some aren't. The consequence for the rest of us is incipient chaos and the prospect of doom. The more we hear financial wizards use technical jargon to obfuscate their sentences, the more we can be certain that they're bluffing.
Maybe it's a great joke. What is most likely is that when this crisis is finished, maybe in 2019, the wheels of the next crash will already be turning. As someone who actually lived through all of the Great Depression, I feel like it's an endless bouffe. The problem, of course, is that we already have people living in tents for lack of a home. That's not a bouffe, it's the beginning of our misery.
They make different mistakes in different times and places which are often with disastrous results. Their kin who learn from those mistakes pull society back together in another hierarchical formation until another inevitable series of miscalculations brings the structure back down. While lesser beings bemoan and see patterns everywhere that have only their facades in common.
And the cycling of trials and errors moves on, somehow and at least so far cashing without completely burning.
What's fascinating about your arguments is that they're almost identical to the arguments of Benito Mussolini when he invented Italian Fascism, Maybe the Americans who died on the beach at Anzio died in vain. In two generations we're back to square one.
Thanks for your comment.
The men who died at Anzio were more the victims of the Germans than the Italians (and I encountered soldiers of both armies as prisoners). Plus we had a General at Anzio who was as psychopathic as the best of them - although his successfulness was clearly in the past. And many more have died in vain under Bush, psychopath or just plain fool, than did at Anzio.
Consider the following article, which philistine gave us below:
http://dissidentvoice.org/2008/05/beware-the-psychopath-my-son/
What is your professional opinion of the following:
"We have very little empirical evidence to support the idea that true psychopathy is the result of an abused childhood, and much empirical evidence to support that it is genetic. The neurobiological model offers us the greatest hope of being able to identify even the most devious psychopath. Other recent studies lead to similar results and conclusions: that psychopaths have great difficulty processing verbal and nonverbal affective (emotional) material, that they tend to confuse the emotional significance of events, and most importantly, that these deficits show up in brain scans! A missing internal connection between the feeling heart and the thinking brain is detectable."
Can we identify psychopaths with brain scans?
Is there a reliable personality test for psychopathy? If so, do you see these personality traits in young children? If do, do they carry on to adulthood? Can these traits in children be changed through therapy or education? Is there much research on the subject?
What is important to remember is that psychopathic traits can be associated with visible damage to the prefrontal cortex, but that also psychopathic traits can exist without any visible damage at all to the brain. The human brain is an extremely complex tissue and we should not expect simple answers about human behavior.
The bubble and burst is how this current system is set up. The insiders create the bubble to get large returns. Draw in the suckers and get out before they do.
Now they've added massive returns to the bursting the bubble.
As for most, ordinary investors who are just trying to put enough away for retirement - good luck and godspeed.
One result of the Great Depression that isn't talked about much is the generation of extremely thrifty people. This attitude was lost a couple of generations later and is part of what created the current "credit bubble" bursting.
The Great Depression was sparked by a "stock bubble" bursting. Instead of credit artificially inflating prosperity, it was stocks that were artificially inflated on margin and insider trading until it collapsed.
We have many lessons to learn again.
I recently summed up the current situation in US finance for a friend of mine as the result of Wall St.--beginning in the Reagan era--purchasing from congress the exclusion of almost all financial crime from US criminal prosecution.
And I must point this out for all of the "Christian Businessmen" here in the US [a term that must surely be a theological oxymoron]:
The Wiccan Rede--the "golden rule" for the much loathed pagan witches--reads as follows:
"An Ye Harm None, Do What Ye Will"
For those in the Financial Industry [industry being an absurdly applied misnomer], their mantra is simply "Do What Ye Will."
Christian or not, the laissez faire attitude in the US business community has inspired the majority of financial business players to have no regard whatsoever for any harm done.
If you haven't read this article by the author of Liar's Poker, you may want to.
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?
It's from the belly of the beast.
After 1929, laws were passed to prevent the most egregious abuses from "ever" happening again. But about 60 years later, those laws were quietly and deliberately removed. And, new laws were passed which blocked regulation either on the basis of "insurance" or "gambling."
I don't know about you, but when I see photos of Al Capone on the front page of today's HuffPo, I see that image in a very different light. I know that this nation has been looted by an organized-crime element just as vicious and cruel and heartless as Al ever was in his worst heyday.
You see, this isn't just about a bunch of thugs who gamed the system: this is about a bunch of thugs who re-wrote the system... and in the House, about 250 conspirators voted "aye"; in the Senate, at least 51. Regulatory agencies were handcuffed, and/or bought.
So, to me, this is not "an economic downturn," not even one brought about by "fatuosity." No, Dan, this is H-I-G-H C-R-I-M-E.
How many times are we doomed to see just what harm High Crime can do, before 'any civil officer' actually gets impeached and thrown into jail? Crime never stops until you stop it.
I love the J.P. Morgan quote. Some things never change.
the airheads on wall street for years. these punks don't have a clue what it takes to run a manufacturing company, meet a payroll...........it was a game of quarterly numbers. my
company has parlayed itself into the ground, destroying suppliers and employees alike, and we are just hanging on our fingernails.
here is what wall streeters want: they want a product that costs nothing, to be sold for
some golden price that makes a million percent profit, they care not to whom. they want workers to pay the company
for the priviledge of working there. vendors are supposed to send raw material and parts just]
for the sheer joy of providing this company with their stuff. - and they are spose to make a profit too.!
fatuous doesn't even cover it! line em up, line em all up - as james taylor sings............
This observation is spot-on. I've been saying it for years.
Our economy as currently constructed rewards the amoral and reckless, and exploits the productive. Giving more money to the scoundrels on watch at the time of the crash while being guided by the ones responsible for it seems wholly nonsensical to me.
And he's only one. The real value that has come out of the various Congressional hearings is seeing how these "great minds" work -- or don't work, as the case may be. Sociopathic values -- it is the only explanation. .
http://www.dissidentvoice.org/2008/05/beware-the-psychopath-my-son/
Here's an excerpt: "...civilization, as we know it, is largely the creation of psychopaths. All civilizations, our own included, have been built on slavery and mass murder. Psychopaths have played a disproportionate role in the development of civilization, because they are hard-wired to lie, kill, cheat, steal, torture, manipulate, and generally inflict great suffering on other humans without feeling any remorse, in order to establish their own sense of security through domination. The inventor of civilization — the first tribal chieftain who successfully brainwashed an army of controlled mass murderers — was almost certainly a genetic psychopath. Since that momentous discovery, psychopaths have enjoyed a significant advantage over non-psychopaths in the struggle for power in civilizational hierarchies — especially military hierarchies."