What you see depends on what you have seen. And breathed.
You may want to write that down. Just remember us when you quote it.
We say that after spending a few weeks driving across the country…and giving an interview to a local financial show. The reporter had set up a camera on the steps of the Art Museum across the street and asked us what we thought was happening in the economy. We began by describing all the terrible things that we see heading towards us…and explaining how the end of the world is coming. But behind us, a group of bums had lit up. Soon, great clouds of marijuana smoke billowed over us. We continued to explain the many terrors of the dark night ahead. The debt bubble. The trade deficit. Federal liabilities. The rise of China. Peak oil, and so forth. The smoke thickened.
And by the time we finished the interview, things didn’t seem nearly as bad as they had at the beginning.
As for our drive across the country…by the time we reached the Western states, Elizabeth had read a book on geology — The Roadside Geology. She saw Precambrian, Cambrian, Paleozoic, Mesozoic, Cenozoic, Triassic, Jurassic, Cretaceous and various other geological formations that we can’t remember. In the back seat, the boys saw only rocks. And by the time we had reached Arizona, they had seen enough of them, they thought, to last a lifetime. Henry could barely be persuaded to look up from his Isaac Asimov books. For his part, Jules had draped a towel over his head so he could watch reruns of Seinfeld shows on his portable computer without the interference of the bright sun.
Our speech topic — America’s Revolt Against Fate — requires a little introduction. Because Americans no longer believe in Fate. They believe in themselves — at least they have since the Reagan revolution helped them out of their Carter-era funk. They believe that they are the captains of their own fates. “Everything is getting better,” wrote Michael A. Ledeen, a neo-conservative dreamer at the American Enterprise Institute. “And if not, we’ll fix it.”
There are some things beyond fixing, we note. Precambrian, Cambrian, Paleozoic, Mesozoic, Cenozoic…all the great epochs of the Planet Earth knew no fixing. There were no votes taken. No opinions asked. They just happened.
Many things just happen, without anyone’s say-so. A man gets struck by lightning crossing a field…or by a crosstown bus while making his way to the other side of the street — accidents happen.
As do major events of history, largely beyond anyone’s comprehension, let alone anyone’s control. Who wanted World War I? Who gained from it? Whose fault was it? Looking back, the answer is no one. And yet, it was the most costly war in human history. After a couple of years, it was plain to everyone that nothing would be gained…that it was a lose-lose proposition. Newspapers spoke of peace. Soldiers on all sides threatened to take matters into their own hands and lay down their arms. And then, Woodrow Wilson stepped into the breach to "fix" it. He managed to prolong the war…add millions of names to the casualty list… practically destroy Western civilization. Every major government of Europe fell in the aftermath. In their place came the ugly "isms" of the 20th century — communism, Bolshevism, fascism, syndicalism, modernism, abstract expressionism — and the world was a different place.
Who wanted the Great Depression? Who made it? Who gained from it? Whose fault was it? We do not know the answer. But we know it got worse after Franklin Roosevelt stepped in to "fix" it.
Not only are events largely beyond your control, but Fate has a way of bringing you what you least want, least expect and most deserve. There are patterns to life, some of them inescapable…some of them inexorable.
Every man born is fated to die. Every breath inhaled is fated to come out. And even the brightest day that dawns is fated to end in a dark night.
So, too, does Fate decree that acts have consequences. Invite the wrath of the gods…and you will regret it. Sow the wind, says the Bible, and you will reap the whirlwind. Give and ye shall receive.
There seem to be certain natural laws that govern life. What goes up must come down. What goes wrong must be set right.
The last time "natural law" was discussed in public was during the confirmation hearings for Supreme Court Justice Clarence Thomas. In an unguarded moment, Thomas had made approving remarks about natural law. The politicians recoiled in mock horror — as if they had found a moth in their soup. The idea that there could be any authority higher than the U.S. Congress was as abhorrent to the politicos as term limits.
But natural law used to be something people believed in. The old English common law had no lobbyists’ fingerprints on it…no congressional sponsors…no pork-barrel amendments. Instead, judges and juries merely tried to "find" the law. They assisted Fate, rather than trying to straighten it out. They saw it as their duty to make sure that what ought to happen did happen. People ought to get what’s coming to them; a common-law jury of 12 men "good and stout" helped make sure they did.
But it is a new world, we keep saying. Now a congress of men — neither good nor stout, but conniving and willowy, grasping…whose convictions rarely go beyond drunk driving or sodomy — make all the laws. And a whole nation is convinced that there is no gravity. We can get not what we have coming — they say — but what we want.
“The best news about our future,” says the neo-con scholar, “is that it’s still in our own strong hands.”
The U.S. economy — and by derivation, the economy of the entire world — is thought to be in the strong, bony grasp of Alan Greenspan and the Federal Reserve. This too is a departure from former times — back in some paleo-time before the earth cooled…before there was rap music…before even the central bank of the United States was formed — under the selfsame President Woodrow Wilson who almost single-handedly derailed Western civilization…and even before there was a United States of America — the two Adams…Adam Smith and Adam Ferguson…began what was to become the study of modern macroeconomics. But the two men were hardly economists of the modern stripe. They called themselves "moral philosophers." They believed that their mission was to study economies as naturalists studied birds and bees — and to discover the laws by which they operated. The two ur-economists believed in fate…that an "invisible hand" — which they took to be the extended hand of God himself — made sure that things worked as they should.
But in this new world, it is the hand of Alan Greenspan that is supposed to make sure things work out — not as they should, but as they wish.
Markets make opinions, as they say. Markets, for the last quarter of a century, have been so delightful that they have encouraged in Americans a delightful opinion of themselves. They believe themselves capable of just about anything — including controlling their own fates. What they have seen over the past 24 years leads them to see a future as rosy as daybreak. The "new dawn" that the Reagan era began, they believe, will last forever.
As markets make opinions, it should not surprise us that opinions are as cyclical as markets themselves. Technological progress is cumulative and universal.
An internal combustion engine is the result of many generations of accumulated progress in metallurgy, chemistry, mechanics and so forth. It will work as well in Vancouver as in Calcutta.
But in other things — love, war, markets and central banking, for example — there is little real progress. Instead, we merely repeat the same mistakes, over and over again, in patterns that are cyclical and local.
The internal combustion engine works as well as in Paris, France, as it does in Paris, Texas. But war is far more popular in the hollows of West Virginia and the plains of West Texas than it is in France. This was not always so. Napoleon Bonaparte had led the most expansionist, action-oriented, pre-emptive-attacking foreign policy in history. His large, enthusiastic armies — often coalitions with his allies — had beaten every enemy in Europe. Finally, all Europe made common cause against him, rallied by France’s hereditary enemy — England. Americans, whose cause of independence had been won with French help only 36 years before, did not come to his aid.
Then, France began a long, bad experience with war. The French were beaten in 1870 by the Prussians. Then, in World War I, no nation suffered more — except perhaps the Russians. In World War II, France had the biggest army in Europe, yet it surrendered in six weeks. Then France was booted out of Vietnam…followed by Algeria. Americans were puzzled and indignant that the French did not follow them into Iraq. But given what the French have seen of war, it is hardly surprising that they were not eager to see more.
Meanwhile, Americans have a taste for expansion…for war…for debt. We are "conquerors," says Ledeen. We can’t imagine that the wheel still turns, that Fate still waits for us as it has for so many before us.
“Remember the vogue of Japanese-style capitalism in the ’80s, which, according to a bevy of fashionable intellectuals, was destined to buy America and leave us in the dust?” writes Ledeen, triumphantly.
“Remember the oil sheiks of the ’70s who, according to the usual suspects, were going to by America with the petrodollars?” he continues.
“Remember the fanciful European expectations of dominating the world market with the euro”? he went on in 1999.
Ledeen was able to see the blockheadedness of others, but not of himself. He was unable to imagine history would continue grinding down the ambitions and pretenses of the world’s success stories…and that Americans would be next on the list of those brought low by Fate.
Precambrian, Cambrian, Paleozoic, Mesozoic, Cenozoic…
Americans seem to think that history has come to a dead stop — with them on top of the world.
Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.