The False Face of Innocence

Before the current economic crisis is over, Ben Bernanke is likely to become one of the most reviled figures in American history. Bernanke’s popularity meltdown is still in the future, and a future administration may well encourage Bernanke to resign before his term expires.

None of this future scorn heaped upon Bernanke will be justified. No, Bernanke is not doing a good job; he should be held accountable for his failures. Yet, if Ben Bernanke was removed from office today, nothing would change. The nature of the problems we face will not change until the systemic conditions that created the problems change. And the systemic conditions that we face are a function of our, not so easily changed, collective beliefs.

A Course in Miracles, a modern statement of the perennial spiritual wisdom, cautions, “Beware of the temptation to perceive yourself unfairly treated.”

The Course goes on to say this about how every ego sees the world:

He is the victim of this “something else,” a thing outside himself, for which he has no reason to be held responsible. He must be innocent because he knows not what he does, but what is done to him. And he cannot escape because its source is seen outside himself.

Now you are being shown you can escape. All that is needed is that you look upon the problem as it is, and not the way you have set it up. How could there be another way to solve a problem that is very simple, but has been obscured by heavy clouds of complication, which were made to keep the problem unresolved?

As a society, we absolutely refuse to “look upon the problem as it is.” The “heavy clouds of complication” are our false beliefs that keep our problems unresolved.

When hurricane Katrina struck, the press and the public were quick to be outraged over Michael Brown’s poor performance as the director of FEMA. To this day, there is little reflection on the basic fact of life that a government bureaucracy is incapable of being a nimble, responsive agency. Those who rise to the top of these agencies rise because of their political connections and not because of their competence. The bureaucracy itself is by nature more interested in serving itself than in serving the public. And so in the case of Katrina, church groups and the Red Cross were far more responsive to the disaster than the government ever was.

If you ever played a sport on a team that lacked mature coaching and whose players were immature, the experience was painful. That team would look for scapegoats and would heap scorn on the player who had a poor performance in a clutch situation. Collectively, we are like drunken sports fans who seek to find one scapegoat rather than reflect on the deeper causes behind poor performances.

Similarly, day after day, pundits tell us that our problems can be solved by somehow stabilizing housing prices or forcing them up again. We are told that those who bought houses that they could not afford are victims. We are told that those who spent their home equity on new SUVs and vacations deserve bailouts. We are told that Wall Street and banks should be insulated from losses. We are told that we should elect a candidate who is illiterate about economics and has no record of accomplishing anything, because he acts presidential and promises hope. We are told that the same government that gave us the disaster of ethanol, can better figure out what will replace fossil fuels than can entrepreneurs. We are told by politicians who place their children in private schools that school choice is a bad thing. We are told that corporations like Wal-Mart, which make the lives of hundreds of millions better off, are evil; and that politicians who create problems and enrich themselves in the process are dedicated public servants.

And because much of the public believes some or all of the above, there is no way out of our current economic crisis. To be precise, there are ways out—just none that the public will consider. The public clearly would like to go on believing, until it no longer can, that it is the innocent victim of a bad economy of which it has no part in creating. And the other belief that goes with claiming innocence, is the belief that politicians who promise more of the same will provide a miracle solution that involves something other than our collective change of heart.

In their insightful and illuminating book Mobs, Messiahs and Markets William Bonner and Lila Rajiva observe:

If there is one thing we know about the sentiment of crowds, it is that they change. Today it is greed. Tomorrow it is fear. But rarely is it doubt. So when mass sentiment goes negative, it goes completely negative. People stop worrying about the return on their money and begin to be concerned about the return of their money.

It has been a long time since that sort of fiery comet has come around and people have forgotten the sense of awe and dread it inspires, as it announced the end of the world. They can’t quite imagine what that may be like. They will have to see it again for themselves. It is only a matter of time.

Even a cursory study of history reveals that most people who have ever walked this earth have experienced that “fiery comet.” Like Americans today most falsely proclaimed themselves as innocent. And like everyone who proclaims themselves as innocent we will seek for those to blame—foreign and domestic enemies that help bury our collective refusal to examine our false beliefs.

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8 Responses to The False Face of Innocence

  1. Frank v2 says:

    Dr. B.,
    Innocence and accountability in my mind equates to the not “my fault” mentality that we as a nation collectively have adopted, and I think it is sad. According to Ed Hall’s debt clock, every one of us now owes the world $31,000: that includes my two year old granddaughter who has no concept of money yet! (http://www.brillig.com/debt_clock/ ) What a wonderful legacy we are leaving our children. We as a nation need to become fiscally responsible, and that concept begins at home. We need to all lower our expectation levels a little. Sure we all need a roof over our head, but we don’t need a three car garage and granite counter tops. Nor is home ownership a God-given-right. The other evening I was watching the news and a young couple was lamenting that the high interest rates were affecting their standard of living, and they were thankful that government supported rate relief was in sight. Then a picture of the couple’s 3000+ square foot home was flashed on the screen. Not a starter home, but a beautiful up-scale mini-mansion. But apparently it is not their fault that they bought way more house than they can afford. It is the lenders who extended more credit than the home owners could really afford; hey folks, time to wake-up! Nobody held a gun to your heads and said’ “sign”. Yes, I feel sorry for the hard-working folks that are loosing their jobs and their homes. But I don’t feel sorry for the banks or individuals that over extended themselves, which in turn forced up house prices, which then allowed people to borrow even more money on the “value” of the house. Why are we the tax payers being forced to pick-up the tab as a result of our neighbor’s bad economic choices? One newscaster the other day had the audacity to suggest that the homeowner bailout is good for everyone: it will help the rest of us to keep the value of our homes from falling further. I believe that all this does is stall the inevitable financial implosion that I believe is in our future. At some point we are all going to have to pay the piper. I think the sooner that we look in the mirror and accept our own fiscal responsibility, the better. Just say “no” to government bailouts!

  2. Frank,

    I appreciate your example. It truly is outrageous that the frugal and prudent should be robbed (I should say taxed) to support someone’s mini-mansion.

    The newscaster that you heard is just reading what he is given to read. If the lie is repeated often enough (bailouts are good for everyone) many will adopt the position as their own. The actuality is that bailouts will increase the severity of the unfolding economic crisis.

  3. E says:

    Simply, the matter arises when people are involved. Sometimes, there is no logic. Should you buy a house you can’t afford if someone will loan you the money? Logic dictates that, although the capability exists, you should not chose this option. By the same token, while Government is not the answer, “should” people look to their elected officials for hope? To be the “Authority” on a financial matter? Logic would indicate “no” since most of these people have no experience in macro-economics beyond spending their election war-chest. So let us ask similar questions. Does it make sense to go to, say, Columbia University, rack up $125,000 in debts, and major in psychology? Someone I know did this and he couldn’t get a job to feed, house, or pay even a portion of his monthly loans upon graduation. Confidence in your education as you step off the Number 2 subway on your way to file folders does not equate to a “great decision”. Additionally, is there a material argument for going to one of the most expensive law schools in the nation if all you want to do is public interest law? Certainly, it is the first step in a long succession of decisions which may ultimately affect your personal finances (how many years will it obstruct savings, mortgage qualifications, etc.). Perhaps, if going to UMBC for an MBA permits you to realize a $350,000 job on Wall Street, that would make sense. If this is not the case, why the hell would you rack up debt if the payoff is extended to a “20 year horizon.” Would not the better half of valor be to start a well-researched company, live below your means, and methodically build wealth? The overall point of this long-winded exposition, Prof B, is that we’re dealing with humans. People. And people, in their myriad and mysterious complexity, are more comfortable with hoping and dreaming of rescue than they are of crafting a viable solution when posed with serious (perhaps even financially crippling) issues. If we took people out of the equation, we could really solve things.

  4. E,

    I agree with you. Unlike what some economic models assume–individuals do make irrational decisions. Those errors are correctable in the course of the market process. Of course when government rescues than that process cannot work. Sometimes the best thing to do is to let the addict hit bottom.

  5. igli1969 says:

    Even though I never was a Marine (I was Army, and still enjoy making all-in-jest jokes about Marines), I entirely agree with their admonition to “adapt, improvise, and overcome.” When faced with a seemingly difficult obstable to overcome, try something *different*, for pete’s sake! Unfortunately, politics prevents that.

    My wife and I are still in the 1,350 sq ft house we bought after I left the Army in 1977, many refi’s later. But I never would agree to take the amount of money out of our equity the lender wanted us to, only what we figured we could afford. Fortunately, we both have good incomes, and never had to spend a dime on child care, as my mother-in-law lives with us and helped raise our daughter, who will be startign at U of Delaware later this month. She is (as of now) in a degree program for Apparel Design, a love she has had for many years (thank you, Barbie). Assistant Store Buyers can make upward of $70,000 with a major chain, so there are good prospects. She is not as libertarian as I am (read: anarcho-capitalist), but is getting there. Seeing her first pay stub should complete that journey.

    On a side note, we just were on vacation and I saw a fellow wearing a tee shirt with a line-drawing portrait of Obama, chin up and to the viewer’s right, looking into the distance (read: a “changed” future). Looked like Che without the beret and beard. Unconscious irony, anyone?

    Obama and McCain. Sort of like the choice of being slowly drowned or burned to death. I’m so excited I can hardly stand it.

    Chris C.

  6. Chris,

    How crazy it is that those who lived with integrity find themselves bailing out those who didn’t.

    I was just reading about what a murderous thug Che was. How insane it is that so many have a romanticized image of him!

  7. Jim D says:

    Couldn’t agree more. Bailouts in this situation are pretty much akin to paying off a gambler’s debts while he’s still sitting at the table.
    The analogy to an immature sports performance is apt. My stepson used to play goalie, and after one particularly tough game, let in a shot in the final minute that lost us the game, 3-2. He felt horrible about it, and the team pretty much blamed him, too. It took a long time to make him see that the loss was not his fault. While not letting him off the hook for missing the block, I had to make him realize that whenever the other team scores, he’s not the only person who screwed up. Why did the offense lose possession? Why didn’t the offense score more points so it didn’t matter that he let one more goal in? Why didn’t the defense stop the attack? What about the previous half’s goalie who let int he other 2 goals? Just as one person can’t win the game, one person can’t lose it; everyone is at fault.
    Same thing here. All these people blaming a bad economy or predatory lending, no new jobs, whatever, need to shut up and take a good look in the mirror, because they all played on the same losing team, all blaming each other and everyone but themselves for the loss. Predatory lenders go out of business if you don’t buy into their promises. Taking good care of the home you’re in makes housing prices go up, too. Saving money instead of buying into the Jones’s lifestyle helps to weather the storm. Saving instead of depending upon the value of your home to go up is also a pretty good idea. If we don’t get ourselves out of whack, a (perfectly normal) slowdown in the economy doesn’t cripple us financially.

  8. Jim,

    Thanks for your keen insights. Great gambling analogy!

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