1 Boring Old Man

Desperately Seeking Seriousness

… As the economic scene has darkened, I’d argue, Americans have rediscovered the virtue of seriousness. And this has worked to Mr. Obama’s advantage, because his opponent has run a deeply unserious campaign.

Think about the themes of the McCain campaign so far. Mr. McCain reminds us, again and again, that he’s a maverick — but what does that mean? His maverickness seems to be defined as a free-floating personality trait, rather than being tied to any specific objections on his part to the way the country has been run for the last eight years. Conversely, he has attacked Mr. Obama as a “celebrity,” but without any specific explanation of what’s wrong with that — it’s just a given that we’re supposed to hate Hollywood types.

And the selection of Sarah Palin as the Republican vice-presidential candidate clearly had nothing to do with what she knew or the positions she’d taken — it was about who she was, or seemed to be. Americans were supposed to identify with a hockey mom who was just like them.

In a way, you can’t blame Mr. McCain for campaigning on trivia — after all, it’s worked in the past. Most notably, President Bush got within hanging-chads-and-butterfly-ballot range of the White House only because much of the news media, rather than focusing on the candidates’ policy proposals, focused on their personas: Mr. Bush was an amiable guy you’d like to have a beer with, Al Gore was a stiff know-it-all, and never mind all that hard stuff about taxes and Social Security. And let’s face it: six weeks ago Mr. McCain’s focus on trivia seemed to be paying off handsomely.

But that was before the prospect of a second Great Depression concentrated the public’s mind…

It started in the Nixon Era with the infusion of the Young Republicans into the Republican Party heirarchy – typified by Donald Segretti and later Karl Rove. But then it became a global strategy with Ronald Reagan [speaking of celebraties]. But with George W. Bush, it became a theater of the absurd – a scripted Presidency with a pieced together coalition of the religiously naive, the heirs of the anti-commie crowd, the military hawks, and the business opportunists. What held it all together? Illusion is the answer. We had the illusion of a surging economy, based on an escalating National Debt and economic "bubbles" that were bound to burst.

But the illusions are everywhere. We went to war in Iraq based on a created illusion that Saddam Hussein, a blowhard of epic proportions, was some kind of real threat to the security of the United States – nothing could be further from the truth. And we were told we were "winning" this war for five years when there’s really nothing to win. And we’ve been fed an illusion of American nobility while committing war crimes in this war against a war criminal.

But the biggest illusion of them all has been to ignore the real challenges of the 21st Century – Energy, Global Warming, and Overpopulation. Without Overpopulation, we wouldn’t have the other two problems, and neither can be solved without addressing Overpopulation. Moral arguments against birth control [including abortion] ignore the obvious. We are a species like all others – designed to proliferate. In the absence of predators, the only choices are population control or awaiting some natural or man-made disaster to do it for us. Ignoring the inborn goal of the human sexual instinct is a mistake – based on an illusion of self-regulation.

But the derivatives market is the current paradigmatic example:

Greenspan Testifies: Our Political Language Just Changed

Alan Greenspan’s testimony before congress earlier this week should be looked at as a moment where the way we talk about politics and the economy fundamentally changed. Greenspan, protege of Ayn Rand and the driving mind behind the notion that risk can be contained by having ever growing numbers of market players taking pieces of that risk, has now admitted that "Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity (myself especially) are in a state of shocked disbelief."

The whole concept of self-regulation through self-interest is now dead, especially in finance but probably in other industries as well…

Bringing this back to politics–over the last 20 years Democrats have not only supported Republicans in ushering in new "self regulation through self interest" policies, they’ve even pioneered them.  Derivatives, syndicated loans and packaged asset backed portfolios all have their origins in the 90s and are the result of bipartisan collaboration between Greenspan and the Clinton Administration… Nobody cared about financial apocalypse.

Now Greenspan admits something extraordinary (for him): that credit default swaps need to be subjected to outside oversight, that packaged debt portfolios need to be subject to some regulation to make sure they’re actually stable and that maybe banks should be required to keep some of any portfolio they create on their own books so that they have an incentive not to package toxicity with more toxicity. Greenspan is a convert. He believes, however painfully, in regulation…

We’ve recently changed the name of the «Gulf War» to the «First Gulf War». Now we’re playing with changing the name of the «Great Depression» to the «First Great Depression». After the «First Great Depression», we put a system in place to regulate our beloved Capitalism that survived for several decades, but then those regulations were to eroded. That erosion was supported by increasingly bold illusions created by those who benefited the most. Now, seeing that the Great Oz is only an illusion – a little man behind the curtain – we’re waking up and getting serious. I have no idea how far we’re going to go into the «Second Great Depression», but it’s going to be further than any of us would like. The real issue at stake right now is whether we will be able to establish a balance that will endure over time – a balance between freedom and regulation that avoids the antipodes of a stiltifying socialism or a destructive financial hedonism.