Three Real Truths
24/September/2008 10:43 Filed in: Weekly Column
Volume 10, Issue 38
PDF copy
Even in my currently isolated position in the suburbs of Nowhere I had the opportunity to listen on the Fox News Sunday Podcast of Treasury Secretary Paulson’s attempt to describe the current financial bailout package that is supposed to be working it’s way through Congress this week. My thoughts were it was grossly simplistic, shortsighted, and supported mostly by wishful thinking. I suppose that last sentence sounds somewhat oxymoronic. Yep! That pretty much is the essence of my feelings.
The whole shebang seems to have nothing to do with the underlying principles that brought about this “crisis,” and the overriding tone of his rhetoric seemed to be we needed this “crisis” to provide the opportunity to fix a broken system. That sure gives me confidence that everything is now going to be smooth sailing on the rising ocean of American debt. But one must wonder just how much more ballast the old ocean liner “Constitution” can take on without a small tempest overriding the gunwales.
The course has been set and a President with a thirty percent approval rating and a Congress still sailing along at about one third that number, have it all under control. You can take that to port, or to the bank?
This brings me to three truths I have heard recently that look more deeply at the American experiment at this time and place. What they show is our current stupendous change voyage may only be beginning.
The first truth comes from Benjamin Franklin, in a speech given by Mark Sanford, the conservative conservationist governor of South Carolina, to the state Republican Party convention. This is the link to the thirteen and a half minute YouTube video.
The story goes, Dr. Franklin was leaving the meeting hall at the end of the Constitutional Convention in 1787. As he was walking down the steps a spectator asked the senior statesman, “Sir, do we have a monarchy, or a republic?” To which Ben was said to reply, “We have a republic, if you can keep it.”
That republic now faces one of it’s most severe tests in her history as this debt and bailout “crisis” unfolds over the next few years. Treasury Secretary Paulson has deemed this the worst financial crisis since the Great Depression, but eliminating the financial aspects, this may play out as the greatest struggle the American people have faced since the Civil War.
The Civil War was fought over human rights, specifically the rights of the individual in the collective experiment of the American Republic. This war puts at stake the same collective rights of the individual versus the ability of a few elite to make as much money as they possibly can, without regard to anything but themselves and not pay the consequences for these actions. In short, and put in twenty-first century terms, it is a war of worldviews and the future of the American experiment as a self-governing nation stands in the balance.
In his speech, Governor Sanford goes into detail about the “brand called the Republican Party,” and how it has lost effectiveness. This crisis deepens that brand problem and now includes the brand of the American Presidency. Furthermore, most Americans would rather vote for some generic other than either Obama, or McCain.
We have now had almost eight years of the Bush Administration. This latest financial bailout, serves to put, at least, the current legacy of President Bush near the bottom of two term Presidents. That should give Bill and Hillary Clinton some positive reassurance.
However, when you contrast the Bush Administration with the current Democrat Party leadership in Congress, the Administration, in the present and historically, doesn’t look all that bad. It is just that Americans are so angry about the Iraq war and other failures of President Bush they have so far failed to make a serious appraisal of the leadership of Senator Reid, Speaker Pelosi, and other Democrats these last two years. Furthermore, this “crisis” and it’s repercussions will severely curtail all wealth producing change and growth well into the future.
The brands of all levels of elected governance seem to be in serious trouble, except in Alaska, if you believe the news, and in South Carolina, at least because I borrowed the theme of Governor Sanford’s speech.
“We have a republic, if you can keep it.”
Our second truth we have used a number of times recently. This concept comes from Alexander Solzhenitsyn who said, “The pursuit of material wealth, as the prime purpose of humanity is the most pointless life conceivable.”
The Declaration of Independence speaks of the “pursuit of happiness.” That has now been replaced with the “pursuit of material wealth.” The sad and very depressing reality of it all is most Americans now cannot distinguish between either concept.
When you read much of the foreign press concerning the pending bailout plan, that lack of material discernment is the essence of much of the reporting. Most of that of course comes from those, “bad socialist nations in Europe and Canada,” who truly don’t understand our definition of unbridled greed.
However, if we contrast the concepts of socialism and capitalism, as they exist in western culture today, we miss the fundamental reality that both individual rights and the powers of governance are Biblical principles. The reason that American style capitalism is in the situation that it now finds itself is that American governance has ceased to exist except for the furtherance of American style capitalism. The essence of that capitalism now has one rule, “Show Me the Money!” MY MONEY and ME, are the only operatives.
The checks and balances America’s founders and God put into the fundamentals of good government began to be systemically removed in the Reagan Administration, essentially when Money replaced Wealth as the basis of free enterprise. American ceased to be concerned with the management of her blessing of unparalleled wealth and instead focused upon only the money, credit money.
Through capitalizing and monetizing that inherited wealth of America, defense spending was essentially able to spend the former Soviet Union into bankruptcy and collapse, thus ending the Cold War. Continuing that theme Al Qaeda, spending very little comparatively, has been able to essentially do the same thing to the United States. Call it a War on Terror, but instead of fighting it as such, we attempted in Iraq, Afghanistan, and elsewhere, to fight a war by nineteenth century colonial means.
We have discussed at depth and breadth in these Chronicles for a very long time, the difference between wealth and money. It is apparent from recent statements from both the Fed and the Treasury that they have no clue that a difference exists. To put it in very simple terms, wealth is tangible, money is intangible (at least as money is now defined).
Historically money is only an aid to commerce, and only has value as long as what stands behind it (wealth), appears to have value. The American dollar is no longer worth what it should be, because the money supply has devalued, both the strength of the economy, but more importantly the will and the substance of the American people. As a result of this inept management of money, to advance the elite at the expense of the people, the American experiment is now in jeopardy.
“We have a Republic, if you can keep it.”
The final truth is paraphrased from the thought of evangelist and apologist Ravi Zackarias: When confronted with the truth, the individual has two alternatives, one is to accept it and act upon the truth’s precepts, the other is to repress it and essentially flee as far as possible from those presuppositions. There is no middle ground.
When confronted with the truth of the reality that America’s current version of laissez-faire capitalism has failed, instead of accepting that reality, the Federal Government is now in the process of fleeing from that reality. As a consequence the whole concept of buying “highly discounted assets with the hope of some day selling them at a profit” seems as highly speculative as the soundness of the highly speculative investments possessed initially.
Then again, “there is no guarantee that this will work,” because we really haven’t got a clue what we are doing, but you, the American taxpayers are to trust us because we are experts, fleeing into the fallacy of creation of suspect credit money at any cost.
Now there is some asset value and true wealth at the bottom of this financial fiasco. There is a building called a house. But the true question needs to be asked, what is the true value of that underlying wealth?
In the old days if you wanted to sell a mortgage you had to do it at a steep discount from its prima-facie value. The reason for that was a term known as risk. (Risk: a situation involving exposure to danger.)
These newer individual mortgages were bundled into enormous packages and pedaled around the world, by the now total defunct American investment banking community, because there was no perceived risk. What was the basis for this, then optimistic assessment?
“American home values will continue to go up at a rate much higher than inflation as long as the sun rises and the poor, dumb American people believe that owning a personal home is worth whatever cost we can extract from them. After all it is all about the Money, My cut of the deal, and Your opportunity. We have made it so easy, because we have created subprime and zero down financing, virtually anyone without a brain can now qualify to buy a home.”
So now, according to the bailout plan, over time and to restore the credit money world, the government and its experts are going to work their way down through all the masses of dung, and resell that house somewhere, through some sort of mechanism, thereby recouping some portion of the bailout money. At least that is the plan, and if that doesn’t work the financial elite, will create another plan and then they will blackmail the do nothing government into doing something else. Now there is truth you can take to the bank!
I suppose the question that was never asked, “Would it be cheaper in the long run to just write this all off, basically giving the houses away to the buyers, and when they come back to get a home equity loan to buy that new boat or other material toy, loan them the money under some reasonable loan criteria?”
The funny little thing about American real estate, it historically has been as close to a free market that exists in the world. That was based upon, you buy what you can pay for and you sell for what you can get. However, the truth of reality is that markets change and a major contributor to that changing market is the pursuit of happiness, not the pursuit of money. If the opportunity and financial cost of owning and buying a personal home is not worth the hassle, homes quickly become houses, and houses really are just a commodity.
When you add to that the baby boomers are soon going to be looking to sell their large homes to retire, and pension funds will have to sell their mortgages to pay retirement benefits in real money. We are quickly headed not for continued housing inflation, but a very major market correction. Now if real estate agents, potential house sellers, potential house buyers, and this government fiasco would realize these truths, instead of denying and running away from this reality, we could again look to building wealth and not just creating money. Until that happens there is an old saying that applies as well in the twenty-first century as it did in the eighteenth:
“We have a Republic, if you can keep it.”
PDF copy
Even in my currently isolated position in the suburbs of Nowhere I had the opportunity to listen on the Fox News Sunday Podcast of Treasury Secretary Paulson’s attempt to describe the current financial bailout package that is supposed to be working it’s way through Congress this week. My thoughts were it was grossly simplistic, shortsighted, and supported mostly by wishful thinking. I suppose that last sentence sounds somewhat oxymoronic. Yep! That pretty much is the essence of my feelings.
The whole shebang seems to have nothing to do with the underlying principles that brought about this “crisis,” and the overriding tone of his rhetoric seemed to be we needed this “crisis” to provide the opportunity to fix a broken system. That sure gives me confidence that everything is now going to be smooth sailing on the rising ocean of American debt. But one must wonder just how much more ballast the old ocean liner “Constitution” can take on without a small tempest overriding the gunwales.
The course has been set and a President with a thirty percent approval rating and a Congress still sailing along at about one third that number, have it all under control. You can take that to port, or to the bank?
This brings me to three truths I have heard recently that look more deeply at the American experiment at this time and place. What they show is our current stupendous change voyage may only be beginning.
The first truth comes from Benjamin Franklin, in a speech given by Mark Sanford, the conservative conservationist governor of South Carolina, to the state Republican Party convention. This is the link to the thirteen and a half minute YouTube video.
The story goes, Dr. Franklin was leaving the meeting hall at the end of the Constitutional Convention in 1787. As he was walking down the steps a spectator asked the senior statesman, “Sir, do we have a monarchy, or a republic?” To which Ben was said to reply, “We have a republic, if you can keep it.”
That republic now faces one of it’s most severe tests in her history as this debt and bailout “crisis” unfolds over the next few years. Treasury Secretary Paulson has deemed this the worst financial crisis since the Great Depression, but eliminating the financial aspects, this may play out as the greatest struggle the American people have faced since the Civil War.
The Civil War was fought over human rights, specifically the rights of the individual in the collective experiment of the American Republic. This war puts at stake the same collective rights of the individual versus the ability of a few elite to make as much money as they possibly can, without regard to anything but themselves and not pay the consequences for these actions. In short, and put in twenty-first century terms, it is a war of worldviews and the future of the American experiment as a self-governing nation stands in the balance.
In his speech, Governor Sanford goes into detail about the “brand called the Republican Party,” and how it has lost effectiveness. This crisis deepens that brand problem and now includes the brand of the American Presidency. Furthermore, most Americans would rather vote for some generic other than either Obama, or McCain.
We have now had almost eight years of the Bush Administration. This latest financial bailout, serves to put, at least, the current legacy of President Bush near the bottom of two term Presidents. That should give Bill and Hillary Clinton some positive reassurance.
However, when you contrast the Bush Administration with the current Democrat Party leadership in Congress, the Administration, in the present and historically, doesn’t look all that bad. It is just that Americans are so angry about the Iraq war and other failures of President Bush they have so far failed to make a serious appraisal of the leadership of Senator Reid, Speaker Pelosi, and other Democrats these last two years. Furthermore, this “crisis” and it’s repercussions will severely curtail all wealth producing change and growth well into the future.
The brands of all levels of elected governance seem to be in serious trouble, except in Alaska, if you believe the news, and in South Carolina, at least because I borrowed the theme of Governor Sanford’s speech.
“We have a republic, if you can keep it.”
Our second truth we have used a number of times recently. This concept comes from Alexander Solzhenitsyn who said, “The pursuit of material wealth, as the prime purpose of humanity is the most pointless life conceivable.”
The Declaration of Independence speaks of the “pursuit of happiness.” That has now been replaced with the “pursuit of material wealth.” The sad and very depressing reality of it all is most Americans now cannot distinguish between either concept.
When you read much of the foreign press concerning the pending bailout plan, that lack of material discernment is the essence of much of the reporting. Most of that of course comes from those, “bad socialist nations in Europe and Canada,” who truly don’t understand our definition of unbridled greed.
However, if we contrast the concepts of socialism and capitalism, as they exist in western culture today, we miss the fundamental reality that both individual rights and the powers of governance are Biblical principles. The reason that American style capitalism is in the situation that it now finds itself is that American governance has ceased to exist except for the furtherance of American style capitalism. The essence of that capitalism now has one rule, “Show Me the Money!” MY MONEY and ME, are the only operatives.
The checks and balances America’s founders and God put into the fundamentals of good government began to be systemically removed in the Reagan Administration, essentially when Money replaced Wealth as the basis of free enterprise. American ceased to be concerned with the management of her blessing of unparalleled wealth and instead focused upon only the money, credit money.
Through capitalizing and monetizing that inherited wealth of America, defense spending was essentially able to spend the former Soviet Union into bankruptcy and collapse, thus ending the Cold War. Continuing that theme Al Qaeda, spending very little comparatively, has been able to essentially do the same thing to the United States. Call it a War on Terror, but instead of fighting it as such, we attempted in Iraq, Afghanistan, and elsewhere, to fight a war by nineteenth century colonial means.
We have discussed at depth and breadth in these Chronicles for a very long time, the difference between wealth and money. It is apparent from recent statements from both the Fed and the Treasury that they have no clue that a difference exists. To put it in very simple terms, wealth is tangible, money is intangible (at least as money is now defined).
Historically money is only an aid to commerce, and only has value as long as what stands behind it (wealth), appears to have value. The American dollar is no longer worth what it should be, because the money supply has devalued, both the strength of the economy, but more importantly the will and the substance of the American people. As a result of this inept management of money, to advance the elite at the expense of the people, the American experiment is now in jeopardy.
“We have a Republic, if you can keep it.”
The final truth is paraphrased from the thought of evangelist and apologist Ravi Zackarias: When confronted with the truth, the individual has two alternatives, one is to accept it and act upon the truth’s precepts, the other is to repress it and essentially flee as far as possible from those presuppositions. There is no middle ground.
When confronted with the truth of the reality that America’s current version of laissez-faire capitalism has failed, instead of accepting that reality, the Federal Government is now in the process of fleeing from that reality. As a consequence the whole concept of buying “highly discounted assets with the hope of some day selling them at a profit” seems as highly speculative as the soundness of the highly speculative investments possessed initially.
Then again, “there is no guarantee that this will work,” because we really haven’t got a clue what we are doing, but you, the American taxpayers are to trust us because we are experts, fleeing into the fallacy of creation of suspect credit money at any cost.
Now there is some asset value and true wealth at the bottom of this financial fiasco. There is a building called a house. But the true question needs to be asked, what is the true value of that underlying wealth?
In the old days if you wanted to sell a mortgage you had to do it at a steep discount from its prima-facie value. The reason for that was a term known as risk. (Risk: a situation involving exposure to danger.)
These newer individual mortgages were bundled into enormous packages and pedaled around the world, by the now total defunct American investment banking community, because there was no perceived risk. What was the basis for this, then optimistic assessment?
“American home values will continue to go up at a rate much higher than inflation as long as the sun rises and the poor, dumb American people believe that owning a personal home is worth whatever cost we can extract from them. After all it is all about the Money, My cut of the deal, and Your opportunity. We have made it so easy, because we have created subprime and zero down financing, virtually anyone without a brain can now qualify to buy a home.”
So now, according to the bailout plan, over time and to restore the credit money world, the government and its experts are going to work their way down through all the masses of dung, and resell that house somewhere, through some sort of mechanism, thereby recouping some portion of the bailout money. At least that is the plan, and if that doesn’t work the financial elite, will create another plan and then they will blackmail the do nothing government into doing something else. Now there is truth you can take to the bank!
I suppose the question that was never asked, “Would it be cheaper in the long run to just write this all off, basically giving the houses away to the buyers, and when they come back to get a home equity loan to buy that new boat or other material toy, loan them the money under some reasonable loan criteria?”
The funny little thing about American real estate, it historically has been as close to a free market that exists in the world. That was based upon, you buy what you can pay for and you sell for what you can get. However, the truth of reality is that markets change and a major contributor to that changing market is the pursuit of happiness, not the pursuit of money. If the opportunity and financial cost of owning and buying a personal home is not worth the hassle, homes quickly become houses, and houses really are just a commodity.
When you add to that the baby boomers are soon going to be looking to sell their large homes to retire, and pension funds will have to sell their mortgages to pay retirement benefits in real money. We are quickly headed not for continued housing inflation, but a very major market correction. Now if real estate agents, potential house sellers, potential house buyers, and this government fiasco would realize these truths, instead of denying and running away from this reality, we could again look to building wealth and not just creating money. Until that happens there is an old saying that applies as well in the twenty-first century as it did in the eighteenth:
“We have a Republic, if you can keep it.”