Thursday, November 03, 2011

The Mandate of Hell, Pachyderm 1, Unacknowledged Roots

If you've been following (read the prior post below), the concern of unseen elephants in the room has been raised, a cheap metaphor for what we and our leadership refuse to see or discuss.

Turns out there was more than one elephant in the room. Here's one now. Let's call the huge beast walking down your hallways, for want of a better word, Ignorance. Sorry, don’t mean to irritate the sensitive, but hope you're aggravated enough to succumb to the temptation to use a search engine. Why? As a tool to navigate the rivers and channels of (drum roll) the ghastly spectre of the past. That’s one of the biggest pachyderms in the room. It can stomp you, sit on you. So, what to do? Get to know it, pet it, feed it, and encourage it to go back to where it came from. The experience can change a beast into a friend, if not a dinner partner. If you don’t know and acknowledge it, however, historical ignorance can make Godzilla look like a kitty cat.

This elephant then is US, at least the version that refuses to acknowledge anything beyond our generation’s, or peer group’s, purview. Take a look at yourself in the mirror. Like those big ears, that very long extension on your nose? The ivory tusks are cool; just don’t try to sell them in the United States. Okay, open the search engine, or a book (a block-shaped thing with lots of leaves pressed between cardboard). Let’s consider hope and change as national aspirations.

You’ll soon find that hope and change has had more than one day in America. In the hagiography of FDR, JFK, LBJ, RMN, Jimmy, Jerry, Reagan, Bush 1, Clinton, Bush 2, Obama, etc., you'll find an array of angels of hope and change, come to deliver us. Sadly, imbibing in that kind of history makes you even more ignorant. Fact is, all those Great Ones and Devils (depending on which fantasy you believe in) were wagon masters whom WE elected, hoping that their exhortation, threats and experimentation would lead us across the Great Divide between the nightmare of the old world and the dream of a new. As WE cheered, they all hooted about hope and change, as uncertain about what was going to happen next as is the current resident of 1600 Pennsylvania. The key point is uncomplicated. WE not only believed in the rhetoric of each of these generations of leadership, WE encouraged politicians as to what we wanted to hear, what promised changes, what hopes. And then, WE elected them. And, when THEY fell short, or failed disastrously, WE turned on them like children disappointed by the Christmas gifts they themselves had picked out in the toy store. Notice, the active group isn’t THEM, or the EVIL ONE. It’s US. WE came, WE saw, WE liked, WE selected, WE were disappointed, WE raged about the Devil incarnate, WE ran him off the farm, and then WE started the cycle again. It’s the American way. Take your pick, but a favorite for this writer, who played every part in the melodrama, was Richard Nixon.

The U.S. in 1968 was like a freebasing junkie awaking one morning to discover that all that fun he’d been having had left the house wrecked, looted by thieves, with the spouse departed for a more promising partner, and somebody’s children, gaunt and in tattered clothes, looking at him for where the next meal was going to come from. How could this have happened? the junkie cries. We’ve gone to the Moon! We’ve waged an unfunded war for five years in a country that posed no threat to us! We’ve had an unfunded War on Poverty! We’ve encouraged our kids to do their own thing, and a lot of them did, wowing us with their shockers. But now, they’re standing around, staring at us, wondering just what the hell is going to happen next, with Woodstock over, and the adult realities all around and – gasp! involving them, personally, like me, you know? The civil rights movement had transmuted into a zany and violent black power thing. The thrilling and horrifying assassinations had led to nationwide riots. Cities were burning. Millions were staging what looked like an uprising. Oh, my God! Me? I had nothing to do with this. Send me a hero! Do it now!

Someone heard the junkie and, from behind a burning hardware store, softly intoned in a low, somewhat thuggish voice: “you are not silent to me, oh majority,” an announcement that sounded a lot like Someone who had once said I AM.

So, after our pleas, prayers, organizing, cheering, polling answers, and broadly expressed fears created Nixon’s political direction, WE elected him as an enforcer to get mobs off the street, and as a fixer to straighten out this mess already. He did just that. A few samples: Nixon and his administration forced the fight for integrating schools off the streets into the courts. Whereas Johnson’s Department of Justice had only succeeded in integrating 80 school districts, Nixon’s broke the barrier in twenty-one thousand. Legal, as opposed to violent, recourse calmed the country, and marginalized radicals. Unfortunately, the vast debt rung up by Nixon’s predecessor had sucked the future out of the economy. To address that, he played the standard cheat for a spendthrift country; he separated the currency from gold and monetized the debt with fiat money. Americans were just going to have buck up, pay off their overextended credit lines, get used to higher prices and wage stagnation, and wait for better times. WE did! A new foreign policy, aimed at crossing the Great Divide between imperial America, a fantasy we couldn’t afford in blood or treasure, and prudent partner America, began with an alliance with mainland China substituting for massive intervention in South Vietnam as a way to confront the Soviet Union. Very smart, very prudent – it is possible many of us are alive because this administration came into being. And yet, for all this miraculous fixery, Nixon’s administration was cut to pieces by a marginalized opposition’s truly malicious slander and smear campaign, which WE joyously participated in, and by the President’s own paranoia. Both finally forced the old Quaker out in 1975. Why? WE came to agree with the marginalized radicals and, somewhat more reasonably, to fear the President’s paranoia. WE pressured Congress to impeach Nixon. WE cheered when charges were brought. WE wept and sighed when Nixon resigned and vanished into the helicopter with a sad wave. WE and our dreams drove the process from beginning to end. Were we right?

Certainly, we were required to instigate the process. Even dictators and kings don't survive without popular support. We got that role correct. A fabulously dangerous era in American life ended when Richard Nixon took the oath of office on January 20th, 1969. While the machinations of international affairs kept the war simmering for four years before we officially left, fact is, we came out of Nixon’s triumphant beginning to his second term at peace, on reasonably stable terms with our most dangerous opponent, our credit standing somewhat less embarrassing, and enjoying a domestic peace tranquility in much of the country unseen since the early 1960s. Blessed are the peacemakers – hey, this wasn’t said for nothing. But, though WE should have been ashamed to do this, WE acted anyway because WE were disappointed in Nixon, life itself perhaps, and, more deadly, entranced by the rich temptations of mob behavior. WE didn't care or know that the economy was still recovering from its 1960s binge. So, aware that Nixon hadn’t been the Lord, just one of his less attractive servants, WE ignored the fact that his administration had delivered us from a national disaster. Then WE acted like spoiled children instead of as adults (often), taking our revenge on the Loser, Satan, etc. It’s not a uniquely American ritual,of course. However, it bears close witness. Do you detect any parallels between then and now? Think about it. That's what reading in history helps with; you can compare then and now.

Awareness of this common cycle in American politics can remove a lot of the danger of its reoccurring in as destructive a fashion. WE are responsible for doing that. WE are the main actors in this drama, and, as such, have to be at least as responsible as the people WE select to lead us.

In your perusal of where we’ve all been, you’ll find some other suggestive history. For instance, the shenanigans in the credit markets of the last decade have models going back to the Renaissance, where a group of otherwise sane people thought they had found a magic system to escape the bonds of mortality, poverty, and lack of dates, perhaps. Most of these, on discovery, have turned out to be naked scams run not so much by evil geniuses as by common human avarice leading participants to discard the niceties of faith, morality, society and the law to make a fast buck. The worst of these included a lot of liberal sobbing about how this new market trick was going to save the world, or at least a few tarts from suffering rat bites in the Old Quarter.

Here’s favorite version of the writer’s:

Those banking giants of the 70s and 80s, many of them English majors, developed some trickery for loaning money to people who wouldn't pass muster for a loan shark. This was the sovereign risk gambit, where you'd loan five hundred million to some colonel as long as his central government would guarantee the loan. It was rationalized with a lot of frankly embarrassing liberal chatter about saving the developing world...blah, blah, blah. The sovereign risk game served several ends, political and bottom line. The first might arise when your bank's CEO got a call from the State Department insisting that your bank participate in a huge loan to fund an important ally's very important contractor, Mr. So and So, from Nowheresville in the republic of Whoopieland. A big part of the arrangement would be the borrower’s agreement to buy a pile of equipment from Caterpillar or John Deere. A week's due diligence would convince the rawest Assistant Secretary that lending this guy fifty bucks was a bad risk. She’d make her report; and her boss would nod happily at the regional meeting, then say, "Hey, sweets, not to worry. This loan will count as sovereign risk. If the borrower bolts, Uncle Sam's good friend, the President of Whoopieland, guarantees that the bank will at least get the principal back. Considering the fees and interest we're charging, it's a damn good risk." If that Assistant Secretary wanted to become an Assistant Vice President, she’d say, "yes, my lord and master." Six months later, a scenario I often saw: her boss rushes in and gives her the good news, that she's been appointed Assistant Vice President, in large measure because of her decisive support for that loan. The bad news is that Mr. So and So has vanished into thin air, taking the bank's participation of US$500 million with him and his six mistresses. And, worse, the President of Whoopieland has just been overthrown in a coup, and the new government has disavowed any prior international debts. Whoopsie-doodle. "Not to worry, dear. The Chairman has been on the horn with the President of the United States – they went to Yale together, don't you know? And he's got an arrangement, now before Congress, to fund repayment of the principal, and half the fees, in the Fairness to Whoopieland Debt Recovery Act. Sweets, for my part in this, I've been made an SVP and Managing Director, and if you play your cards right, you'll have my old job in a month!"

Eventually, this horseplaying system went as bust as the current housing market, but not for almost fifteen years, when President Clinton was forced by similar sovereign risk arrangements to put up fifty billion to cover Mexico's default. And in all cases, who ended up holding the empty money bag was you and me, just as in the housing crash. The empty money bag is a whole lot bigger now, and, like it or not, we share the blame for the losses.

Now that you’re on your way out of ignorance, you’re probably ready for the next post, regarding the Housing Disaster Nobody Was Responsible For.


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