This blog, mainly concerned with cultural matters, has had little to say about the current financial crisis. I do feel, though, that it is the responsibility of all of us to learn what we can about investing, so we can protect ourselves and our families as much as possible. I therefore appreciate the efforts made by writers like Rick Darby and Ol’ Remus to grapple with the topic from their traditionalist perspective – not to mention The Economic Nationalist, whose blog has been added to the Links section.
Mr. Darby has mentioned the book Bad Money by Kevin Phillips (2008) as a decent introduction to the subject. Phillips, a former Republican strategist, has evolved into a left-liberal who thinks the U.S. needs to work harder to be liked by its adversaries and that “radical Christianity” presents a grave danger to our national well-being, opinions which don’t incline me to trust his views about much else. In particular, I can’t take any analysis seriously that doesn’t take mass immigration into the picture. However, Phillips does seem to be one of the earlier people to point out the problem of the “financialization” of our economy. This is a useful concept, because it expresses something ordinary Americans understand but that has been obscured in the mind of “conservatives” for the last few decades: that having a strong “economy” ultimately means producing things of value. Finance is important, but only insofar as it facilitates real, productive activity.
[The term] Bad Money … is not intended to evoke nineteenth-century robber barons, twentieth-century salad oil swindlers, or twenty-first-century Enron architects. For now, that is too parochial. The reason for applying a negative characterization is historical and institutional, with a deep bow to the inherent vulnerability of human nature exposed to pecuniary temptation, witnessed today on an unprecedented scale. Money is “bad,” in the historical sense, when a leading world economic power passing its zenith – before the United States, think Hapsburg Spain, the maritime Dutch Republic, (when New York was Amsterdam), and imperial Britain just before World War I – lets itself luxuriate in finance at the expense of harvesting, manufacturing, or transporting things. Doing so has marked each nation’s global decline. To institutionalize the dominance of minimally regulated finance at this stage of U.S. history is a bad idea. (p. 20)
For decades, ordinary Americans in places like Michigan have agonized over the loss of the manufacturing jobs that provided a livelihood to so many families. They did more than that: they delivered quality products made by Americans TO Americans. During these decades, it was more often than not the liberals who called for protection of American jobs, while the “conservatives,” scoffing at this, assured us that our “economy” was fine.
I confess to having bought into this mindset in my libertarian days. Wasn’t American greatness rooted in American capitalism? Well, yes, partially. A system of free enterprise enables men of vision, motivated by profit, to create world-changing technologies. But when profit becomes an end in itself, we are in trouble.
Consider housing, one of the current trouble spots in our economy. In the last decade I have lived in and shopped for apartments, condos, and houses. But nobody builds nice houses anymore. Apartments are little more than boxes for people to live in. When you move in they all have identical white walls and beige carpets. When you start making more money you can move into a nicer place with some trees or a pond outside; with more closet space; with another bath. Buy a condo and you get wooden floors, nice tiles, an actual garden of your own. And so forth…but there are no nice houses! All you are paying for are features, each feature carefully priced by corporate formulas, including the “intangibles” like the quality of your neighbors. The more you pay, the more features you get. But there is no house. One thing rarely noted in all the discussion of the housing bubble is how ugly all the new houses are. Is this coincidental? Of course not.
Consider the various ways life has become less convenient in recent years. Food and fuel prices rising. Airports crowded and unpleasant. Banks charging whatever arbitrary fees they can get away with. And we citizens become numb to being gently abused by our government and business, who continue to claim that things are getting better and better.
The real source of the problem is spiritual. And the gap between business leaders and ordinary people mirrors the gap between our politicians and ordinary people: both pursue abstracted, “rational” goals which are unconnected to any sense of the real people they are supposed to be serving. They are greedy, yes, and they are wicked; but it is not ordinary greed. Rather, in their liberal worldview, they are helping other people.
Just not their own countrymen.
A few weeks ago, one of my readers mentioned Edwin Arlington Robinson as a favorite poet. He has a wonderful poem dealing with the worship of the Dollar. Things have changed profoundly since 1916, when the poem was written (for one thing, the dollar coins he alludes to were made of gold!), but the spiritual emptiness he perceived then was the same as that which afflicts us today.
I HEARD one who said: “Verily,
What word have I for children here?
Your Dollar is your only Word,
The wrath of it your only fear.
“You build it altars tall enough
To make you see, but you are blind;
You cannot leave it long enough
To look before you or behind.
“When Reason beckons you to pause,
You laugh and say that you know best;
But what it is you know, you keep
As dark as ingots in a chest.
“You laugh and answer, ‘We are young;
O leave us now, and let us grow.’—
Not asking how much more of this
Will Time endure or Fate bestow.
“Because a few complacent years
Have made your peril of your pride,
Think you that you are to go on
Forever pampered and untried?
“What lost eclipse of history,
What bivouac of the marching stars,
Has given the sign for you to see
Millenniums and last great wars?
“What unrecorded overthrow
Of all the world has ever known,
Or ever been, has made itself
So plain to you, and you alone?
“Your Dollar, Dove and Eagle make
A Trinity that even you
Rate higher than you rate yourselves;
It pays, it flatters, and it’s new.
“And though your very flesh and blood
Be what your Eagle eats and drinks,
You’ll praise him for the best of birds,
Not knowing what the Eagle thinks.
“The power is yours, but not the sight;
You see not upon what you tread;
You have the ages for your guide,
But not the wisdom to be led.
“Think you to tread forever down
The merciless old verities?
And are you never to have eyes
To see the world for what it is?
“Are you to pay for what you have
With all you are?”— No other word
We caught, but with a laughing crowd
Moved on. None heeded, and few heard.