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Fetters of the mind blind us so that we cannot see a solution to this crisis

1 April 2009

We know so little.  This is one of the major themes of this site, hence the frequent rebukes to those speaking with great confidence about things far beyond our ken — based on the available data and tested theories.  In the realm of public policy that is nowhere more salient than economics.  Which brings us to what might be the primary similarity between our situation today and the Great Depression.

Contents

  1. History
  2. That was then; what about now?
  3. Afterword and for more information

History

During the Great Depression policy makers were bound by what economist Barry Eichengreen called “golden fetters.”  For reasons too complex to discuss here, nations could not take the necessary stimulus measures until they unplugged from the gold standard.  That is, going off the gold standard was a necessary (but not sufficient) prerequisite for recovery.  Under the force of events governments did so, but  fearfully — not knowing what lay beyond this step into the unknown. (After WWI, with difficulty they went back onto a gold standard in 1922)

“As a result, individual countries were able to escape the deflationary vortex only by unilaterally abandoning the gold standard and re-establishing domestic monetary stability, a process that dragged on in a halting and uncoordinated manner until France and the other Gold Bloc countries finally left gold in 1936.”
— Ben Bernanke, Essays on the Great Depression (2005)

“What E&T show is that circa 1930 key decision-makers had spent so many years equating adherence to gold not just with prosperity, but with morality, decency, civilization itself, that they couldn’t even contemplate breaking with that orthodoxy – even in the face of total catastrophe.”
— Paul Krugman, “What’s our gold standard?“, blogging at the New York Times, 27 March 2009

Notes on these:
(1)  “E&T” refers to “The Gold Standard and the Great Depression“, Eichengreen and Peter Temin, June 1997
(2)  For more about this see Government policy errors as a cause of the Great Depression (1 November 2008)

With the clarity of hindsight, we can see what was mysterious to them.  As in this graph from Brad Delong’s site, “The Earlier You Abandon the Gold Standard and Start Your New Deal, the Better“, 26 March 2009 (the lines in color show industrial production after going off gold):

Industrial Production

Paul Krugman’s blog has a similar graph showing that the gold standard constrained monetary policy.

That was then.  What about now?

In 1930 mainstream economists were confident they knew what to do.  Now we know that most were wrong.    If our situation was exactly like that of 1930, today’s economists would know exactly what to do.  But that was then; this is now.  The world has changed, but one thing remains the same:  many economists are confident in their solutions.

“{W}e know what to do and how to do it to keep the world economy out of a depression.”
— Brad Delong, “Are We Handcuffed by Golden Fetters?“, posted at his blog, 27 March 2009

Our leaders have implemented the conventional remedies.  Over the next 6 – 9 months we will see the results (lags are long in complex modern economies).  They seek to restore the status quo ante-Depression, the post-WWII financial regime.  Perhaps they will be successful.  But I doubt it.

Might there be an equivalent set of cognitive fetters — as there was in the Great Depression — so that we cannot see the systemic factor that must be changed in order to end the downturn?

Paul Krugman speculates that “the mystique of finance is playing a somewhat similar role” (i.e., like the gold standard in the 1930’s), expanding on his thoughts in “The Market Mystique“, op-ed in the New York Times, 26 March 2009.

I believe there is an obvious candidate, one similar to that of the 1930 gold standard:  the US dollar as the reserve currency.  This is a foundational element of the post-WWII world.  Just as the US is the global hegemon, the US currency is the primary medium of trade and store of value.  But that era is ending.  As we move to a multi-polar world, the US can no longer maintain the twin burdens of hegemony:  monetary and militarily.

We do not want to let go that role.  Nor does most of the world want us to do so.  Almost every nation has adapted to the current world order and fears the large, unknown changes that will follow its ending.  The last such transition was 1914 – 1945; nobody enjoyed it.

The clock is running on the “developed world” — Japan, Europe, and America.  All face some combination of demographic decline, bankrupt social retirement systems, and unsustainable government debt loads.  A new world looms ahead.  We close our eyes to this transition, hoping that it will go away — and we’ll open our eyes to the old world, shiny and new again.

For more information from the FM site

To read other articles about these things, see the FM reference page on the right side menu bar.  Of esp interest these days:

Some posts about the transition to a new world:

  1. Prof Nouriel Roubini describes “The Decline of the American Empire”, 18 August 2008
  2. “A shattering moment in America’s fall from power”, 19 November 2008
  3. “End of Empire” by David Roche, 29 November 2008
  4. The transition between Imperial reigns: what will it mean for America?, 16 December 2008
  5. This financial crisis is the transition to a new world; like birth, it is painful, 11 February 2009
  6. To understand the Imperial Unconscious, Tom provides the Dictionary of American Empire-Speak, 6 March 2009
  7. A look at the new world – after the downturn, 19 March 2009

Afterword — and an important note about comments to this post

This is not a post about the gold standard, and comments about its wonderfulness are off-topic and will be deleted.

Please share your comments by posting below.  Per the FM site’s Comment Policy, please make them brief (250 words max), civil, and relevant to this post.  Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).

For information about this site see the About page, at the top of the right-side menu bar.

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23 Comments leave one →
  1. C. Smith permalink
    1 April 2009 12:34 am

    “The world has changed since then.”

    Technology propels information at a higher velocity. The names differ. But the behavior patterns are familiar. The number of chromosomes in a human holds constant at 23. The planet retains its orbit. In economics as elsewhere, I’m unmoved by these arguments that “the world has changed since then”. They are frequently delivered by political equivalent of the sleight-of-hand magician. Slow them down and analyze them, and see what motives pour forth.
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    Fabius Maximus replies: I have no idea what you are saying. I did not refer to fundamental change, like the relationship of boys and girls. However, the mechanics of the economy have greatly changed from 1929 to 2009. Just as it did from 1849 to 1929. Do you doubt this?

    Like

  2. GI Wislon permalink
    1 April 2009 1:31 am

    C, Smith comments, ” Technology propels information at a higher velocity. The names differ. But the behavior patterns are familiar.”

    Does this mean the velocity of the recession-depression-compression will propel us backwards at warp speed where the human race starts all over again?
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    Fabius Maximus replies: While I am among the most pessimistic of us, guessing that this is the end of the post-WWII era — I have faith that the new era will be even better. While the transitional period might be difficult, the engines of progress have not stopped.

    Like

  3. 1 April 2009 2:18 am

    When trying to repair a piece of broken electronic gear, a starting point is to ask whether there’s a design problem, or a component drift problem. A component drift failure is easy, you replace the drifted or “bad” part with a good one. A bad design is more complicated. Sometimes, normal statistical variation in the constituent component’s lumped parameter values (often this variability is specified) can sometimes conspire to produce failure even though nothing is “wrong” with any parts as specified. The design is said to be “non robust”. The countermeasure is to tighten up the precision requirements for the component parts or change the design to tolerate sloppy parts.

    In the present context, the question becomes, “Is our system (design) bad, or are our people(components)drifted, and inferior to those who came before us? Do we need a new Constitution, or do we need to “fix” our people and institutions, replacing them with “on spec” more tightly functional parts?
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    Fabius Maximus replies: Thank you for the interesting perspective on this! Note that this is a global problem, not just an American one.

    Like

  4. 1 April 2009 3:42 am

    Money consumed silver at the end of the Age of Poetry. To end the Prosaic Age, money consumes itself.

    Money is a symbol for prosperity. But what is true prosperity? Benevolent, just, and enlightened government could help bring about true prosperity. But that is something that we would have to believe we deserved.

    Like

  5. Gary Rondeau permalink
    1 April 2009 5:53 am

    My concern is that we are fettered by the idea of conventional capitalism when it has become the cancer that threatens humanity. Indeed we are in the changing of an era – but we need a better plan than to changes a few of the deck chairs so we can get back to converting our planet’s resources into landfill material so a few individual can be enrichened in the process.
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    Fabius Maximus replies: This sounds broadly similar to Krugman thoughts (see 2 links in the post) about the “the mystique of finance”. I don’t know if this is true, but suspect that the role of capitalism will be greatly revised in the world’s major nations — as it was in the 1930’s. When this is over large changes will be made, with the goal being “never again.”

    Like

  6. C. Smith permalink
    1 April 2009 10:06 am

    @Fabius: “I have no idea what you are saying. I did not refer to fundamental change, like the relationship of boys and girls.”
    Another try: Transactions are still composed of {‘buyer’,’seller’,’marketplace’}. Buffet famously sat out the Internet bubble of the late ’90s. Even though we’re witness to theft on a historically large scale, it remains theft. The patience of your namesake would serve us all well in the “hope and change” era, where so many car salesmen attempt the “world has changed since then” sales pitch.
    Possibly I’ve taken you far out of context; apologies if so.
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    Fabius Maximus replies: How does that apply to this post, which discuses this global economic downturn?

    Looking at a tiny part of the picture — the US government’s attempts to recapitalize the banks — I agree (and have written several articles about this). That is, however, just one piece; this post looks at the overall puzzle.

    Like

  7. pluto permalink
    1 April 2009 2:31 pm

    Your basic proposition is intriguing, please expand on it. Countries that tie their currency will obviously be better off if they abandon the dollar if/when faith in the US government drops. There are other implications of your suggestion that are more difficult to understand based on your brief statement above.

    For example, I don’t understand whether you are proposing to replace the US dollar as the global reserve (per Chinese and Russian suggestions) or if you are proposing to dismantle the idea of a global reserve currency? If the latter, would this be temporary or permanent?

    Also, are you also suggesting this only in the realm of foreign exchange or for domestic policy as well?
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    Fabius Maximus replies: This is speculating about we don’t know, so of course is tentative.

    My guess is that at the end of this process (of unknown length) the US dollar will no longer be the reserve currency. What will replace it? Every currency floating is possible, but probably not practical. A “basket” of currencies seems the most likely alternative, congruent with the geopolitical transition from a hegemon-dominated order (aka US as superpower) to a multi-polar order. This would be a “permanent” change, in that there would be going back to the post-WWII system. History moves, of course, so this is best seen as the foundation for a new global system or regime — which will in turn either evolve or be replaced.

    That transition will force large changes on the US, so US policy will change. Domestic, defense, and foreign. As an illustration of these changes, later this week a post will revise Thomas Barnett’s testimony to Congress about naval strategy.

    Like

  8. senecal permalink
    1 April 2009 3:11 pm

    FM: “All face some combination of demographic decline, bankrupt social retirement systems, and unsustainable government debt loads.

    There you go again — throwing in “bankrupt social retirement systems”. This is not true at all. The Social Security Trust Fund is adequate for many more decades, as long as the government honors its Treasury notes. Medicare is the program which is more vulnerable, and that can be easily fixed by controlling costs, for example, that of drugs.

    As for the main topic here, the reserve currency status of the dollar certainly appears to be in play. My amateur understanding of the issue is that 1) the change could take a long time — some countries preferrring or being obliged to stay within the US orbit, others exiting into their own; 2) loss of reserve currency status would dramatically curtail US consumption, forcing exports and imports back into some kind of equilibrium; 3) the consequences being so great, the “empire” will continue to resist with whatever weapons it has, including the military — for example, by controlling global energy supplies.
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    Fabius Maximus replies: There is no “social security trust fund.” This is easily proven. Write yourself an IOU for a billion dollars. Are you richer? The social security system is part of the US government, and trust fund owns only US government IOU’s — which means it is a empty vessel.

    The US government’s net liability is nearing $60 trillion, most of which is social security, medicare, and pensions (the public debt, from past spending, is $7T). These posts give links to authoritative reports about this.

    (1) The government reports the sad facts every year, buried in the footnotes — which is ignored by the media. For a look at this see The most important story in this week’s newspapers (22 May 2008).

    (2) Major economists and institutions have warned us for decades about this growing problem (see here for a very partial list, including the US Comptroller General, the Congressional Budget Office, the Federal Reserve, the IMF, Moody’s, Standard and Poors).

    (3) See this post for excerpts giving blunt warnings — from the US Comptroller General (in effect our Chief Financial Officer) and a major economist writing in a Fed publication.

    One cause of our crisis is the government’s accounting. Both the “trust fund” and cash basis accounting would be fraudulent if done by a corporation. We lie to ourselves, and will enjoy the unpleasant consequences usually earned by people who prefer illustions to facts.

    Like

  9. 1 April 2009 4:45 pm

    Re#3.

    In the early 70’s, the first “All solid state” power amplifiers appeared. The power transistors available then suffered from high leakage currents. Worse, the leakage was temperature dependent, making an instability called “thermal runaway” very likely. Here, higher temperature, e.g. from playing loud music, caused more leakage, making more power, making higher temperature, making more leakage…until even without any input signal, your transistors ran away thermally, and melted. Circuit designers tried to use amps, and volts based circuit design countermeasures, but they ultimately realized the temperature induced leakage problem was endemic to the components they had to work with. Early amplifiers had huge heat sinks to keep device temperature low. Products barely worked in reasonably cool rooms with good air access to the heat sink fins. “Barely working” in this context means they had small design margins for thermal stability. When these amps were placed into 19 inch racks, basically steel closets, the amps talked to each other through the air temperature inside the rack. Even though individual amps were marginally stable, this interaction led to a perverse global thermal runaway.
    By analogy, amps and volts are like keynesian/monetary variables, interest rates, and (I suppose), money velocity. We barely got those working stably one country at a time. Then we put five or so big keynesian amps into a 19 inch rack called Earth. They talked to each other through an external variable (Credit availability? Trade imbalances?) which fed back into each subsystem inducing the economic equivalent of leakage. Again the result is a runaway type instability.
    You know, Black and Scholes analogised options prices to a non steady thermal diffusion problem, and they got like Nobel prizes and shit. I do think this analogy is ripe with possibility for increased understanding of our current predicament. The thermal runaway problem was aggravated by the fact that you had amps and volts guys struggling to not need or use huge heat sinks because this is Chemical Engineering/Physics stuff, not electronics which they understood. Today, we have transistors that don’t leak. Problem solved.

    Like

  10. senecal permalink
    1 April 2009 6:05 pm

    FM: Thank you for the links to the social security trust fund issue. I am aware that there is nothing but government IOU’s in there, Congress having slyly borrowed all the annual revenue over the years since Greenspan claimed that raising SS taxes would guarantee an “impregnable” SS reserve fund. You may be right that SS is the largest piece of US government indebtedness. However, the fault is not in the SS program in itself, but in congress’s misuse of employee contributions over the years to cover its own operating deficits.

    If you wish to do away with Social Security, as your initial post suggests, you should weigh it against all other federal government programs, and explain why others (the military, for example, or the rigged tax code for industries like oil) or more critical to the American people.
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    Fabuis Maximus replies: Padawan, you are not yet ready to take the trials to become a Jedi Knight. Your attempts to read my mind (“if you wish to do away with social security”) are absurdly inaccurate.

    (1) In my post I said “social retirement systems”, not “social security.” In reply to your comment #8 I defined these as “social security, medicare, and pensions.”

    (2) To mention the cost does not mean I “wish to do away with” these programs. That’s a child’s view, that mentioning the bill is impolite — part of the childish attitude of American (making lavish promises with no thought of payment) that has gotten us into this mess.

    Like

  11. Klugman permalink
    1 April 2009 6:52 pm

    The gold standard is simply a form of fiscal discipline. Without some discipline you get corrupt government control of the economy which always ends in ruin. Krugman sees himself as part of the elite, so he wishes to do away with all discipline that might constrain him.

    One bank in Boston that has managed to do well throughout this banking crisis is being attacked by the FDIC FOR NOT MAKING MORE BAD LOANS!!!! Under the Community Reinvestment Act, any bank that maintained sound banking practices is seen as in violation of the intent of Presidents Carter, Clinton, and the current US Congress.

    Like

  12. joel permalink
    1 April 2009 7:50 pm

    FM: “They seek to restore the status quo ante-Depression, the post-WWII financial regime. Perhaps they will be successful. But I doubt it. Might there be an equivalent set of cognitive fetters – as there was in the Great Depression – so that we cannot see the systemic factor that must be changed in order to end the downturn?

    I agree (basically) with your concept of the ‘post-WWII financial regime’, but I think it is a sub-category of the ‘central banking financial paradigm’. I propose that the CBFP is a more powerful set of cognitive fetters, and blinds us to the destructive impact of central planning. Let us remember that there was no Great Depression until the Federal Reserve got hold of our monetary system.

    I don’t believe in the gold standard, but centralized monetary control has deleterious effects just like any other great accumulation of power.
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    Fabius Maximus replies: I’ve also wondered about this. A rule-based or self-regulating system might work better than the discretionary power given central banks. Many arrangements have been tried to limit and channel their power; I doubt that to date any have proved successful.

    Like

  13. 1 April 2009 10:12 pm

    “key decision-makers had spent so many years equating adherence to gold not just with prosperity, but with morality, decency, civilization itself, that they couldn’t even contemplate breaking with that orthodoxy.”

    Two contemporary ideas fit that description: global free-market capitalism and democracy.

    I don’t suggest that these ideas are fetters, but that mistaking formal structure for substance blinds us. Markets free of government intervention do not automatically become effective, useful markets; public elections and a free press are necessary, but hardly sufficient, conditions for government “of the people, by the people, for the people.” We’re bound by the notion that we already have these things in practice because we have them on paper.

    And now, economics are global. Finance and industry cried — truthfully — that they needed to be unleashed to compete with the rest of the world. Could the banks, or the auto industry, have survived this long were they so cautious as we now, in hindsight, say they should have been? I doubt it. Even the United States can no longer unilaterally choose to control the beast without killing it.

    We probably cannot have a sustainable world economy without an effective world democracy to establish its ground rules. Competition always exists within a framework of boundaries and incentives, explicit or implicit; but we have no means at hand to shape the context in which global capitalism unfolds… and so, like The Sorcerer’s Apprentice, we find it not a faithful servant, but a mindless force run amok.

    Like

  14. FxConde permalink
    2 April 2009 12:15 am

    We all have some set of blinders. The left runs around blaming capitalism and the right runs around blaming government and actually both are correct. Add the people with their blinders who are afraid to accept responsability and it becomes difficult to find a way through this mess but it can still be found if we look hard enough.

    Like

  15. G. Meadows permalink
    2 April 2009 12:24 am

    We can’t talk about the wonderfulness of gold, but can we talk about how horrible paper money is?

    The problem with paper money is that it can be created relatively easily. Gold cannot be created, at least not as far I know. Gold has to discovered and mined. Not necessarily an easy task. In that sense, it creates limits. But paper money has no limits. That’s it’s problem. There has to be a limit, because “money doesn’t grow on trees”. Now all we have to do is to tell our politicians that, and then maybe we start getting somewhere in solving our current problems.
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    Fabius Maximus replies: No you cannot talk about gold here. Next we’ll have to read from people who paint themselves blue and worship trees. The gold-fetish helped cause one Great Depression. No sensible people will try that again. Any additional posts about the wonder of gold will be deleted.

    Like

  16. joel permalink
    2 April 2009 6:49 pm

    FM reply to comment #12: “A rule-based or self-regulating system might work better than the discretionary power given central banks. Many arrangements have been tried to limit and channel their power; I doubt that to date any have proved successful.

    I agree. Voluntary currency is self-regulating, and would absolutely work better than central banking. When individuals decide what to use as money, the value of the money is secure because competing currencies keep each other in check. But when a government controls the only ‘legal’ tender, the currency will inevitably be debased (usually to pay for war).

    The old standard practice was to accept only The King’s Coin for tax payments, then re-mint the coins at the same weight but with less gold (by adding copper, etc.). This produces a lot more coins than the King took in as taxes, enabling him to buy weapons, hire soldiers, and aggress against his neighbors. The process today is both easier and more sophisticated, but the game is the same.

    The gold standard is a great example of a non-successful central bank limitation. But the fault lies with the central banking paradigm, not with the limiting factor.

    People have voluntarily used gold (and silver) as currency for a long time, which is why gold was associated “not just with prosperity, but with morality, decency, civilization itself”. Krugman’s comments here amount to an ad hominem attack. Of course gold has nothing to do with morality etc., but we tell our children fairy tales to keep them safe and we used to say these crazy things about gold because we knew the dangers of a debased currency.

    We seem to have forgotten that governments debase currencies to pay for war, so we don’t recognize the inherent dangers of central banking. These, I propose, are the pertinent cognitive fetters of our age.
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    Fabius Maximus replies: I wonder about the last paragraph. Commenting about consensus thinking is inherently subjective and difficult. My guess is that people are very aware of the possibility of inflation when the economy recovers (other than through a currency collapse, inflation is not unlikely likely during a recession). The great inflation was the formative economic event for the Boomers.

    I wonder if the opposite is the overlooked scenario: government default on its obligations (which can take many forms). For more on this see section 5 of A situation report about the global economy, as the flames break thru the firewalls, 26 January 2009.

    Like

  17. joel permalink
    3 April 2009 8:50 pm

    FM reply to comment #16: “Commenting about consensus thinking is inherently subjective and difficult.”

    Fair criticism, but I read “cognitive fetters” as a specific type of consensus thinking. Do I misunderstand? At any rate, I’ll try again:

    There exists a notion that it is appropriate for a government to control a nation’s money; I call this the Central Banking Financial Paradigm (CBFP). Accepting the CBFP as obvious allows for debate about the finer points of central banking (how much money to print, what interest rate, etc.), but disallows substantive debate about central banking’s role in financial crises.

    Within the context of the CBFP, I agree that ‘the US dollar as the reserve currency’ is a likely suspect. I have concluded, though, that unnatural market prices encouraged a misallocation of resources that caused our current crisis. My quest for the source of the unnatural prices let me to conclude that our central bank’s inflationary policies are to blame. These conclusions are debatable, but only outside the CBFP; within the CBFP they are summarily dismissed.

    I therefore view the CBFP as the appropriate cognitive fetters to discard in the face of our current crisis.

    FM: …inflation is not unlikely during a recession
    I just noticed you said “not unlikely”. Did you mean ‘not likely’?

    I take your point about people’s awareness of inflation potential. My intent was to illustrate the dangers of central banking. Inflation is a great example of something the government ‘has to control’ that would not exist at all in the absence of government monetary monopoly.
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    Fabius Maximus replies: I agree with you, but was just noting that evaluating group views is inherently difficult. It was a caution, not an objection.

    Thanks for catching the error; I have changed “unlikely” to “likely.”

    Like

  18. Ael permalink
    7 April 2009 2:09 pm

    Correlation is not necessarily causation.
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    Fabius Maximus replies: This is given as an illustration (“shown by”, not a proof. There is a large body of analysis showing the dynamics which produced the shown relationship.

    Like

  19. 7 April 2009 9:57 pm

    Another big picture:

    BANKS’ AVERAGE REVENUE GROWTH:
    1970s 13%
    1980s 10%
    1990s 8%
    2000s 5%

    Source: FDIC, US banking industry
    Looks like we’re about to hit zero, right on trend. What were bank revenues trending before 1929?
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    Fabius Maximus replies: The situation is far more complex. Banks resorted to high leverage as their core business suffered from rising foreign competition, disintermediation (a form of domestic competition), and low interest rates (resulting in low credit spreads). The current situation will eventually remove all 3 factors, to a greater or lesser extent. While foreign banks (mostly Asian) will become the global titans, the surviving US banks have a potentially nice future ahead as they return to their core lines of business.

    Like

  20. atheist permalink
    16 October 2009 2:45 pm

    from #3

    In the present context, the question becomes, “Is our system (design) bad, or are our people(components)drifted, and inferior to those who came before us? Do we need a new Constitution, or do we need to “fix” our people and institutions, replacing them with “on spec” more tightly functional parts?

    Thing is, working with a social system isn’t exactly like working with electronic components. You can replace electronic components relatively easily. Trying to “replace” people is much harder, especially when you are talking, not about a single corporation, but about all of society. People tend to resist being “replaced”. So, if our “components” have “drifted” i.e. if people have changed, it seems to me that you have to adapt to the new social context, not try to force people to act like they used to! From what I’ve seen, that doesn’t work very well.
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    Fabius Maximus replies: No one perspective shows the full truth. If the American people no longer exert themselves to the degree required for self-government, your logic implies we accept this and move to plutocracy, tyranny, or some other mechanism to govern the sheep we’ve become.

    The alternative course — more difficult, as you imply: rebuild the fires among the citizens. A love of liberty and willingness to work the Republic’s engines.

    Like

  21. atheist permalink
    22 October 2009 3:48 pm

    FM reply to #21 “your logic implies we accept this and move to plutocracy, tyranny, or some other mechanism to govern the sheep we’ve become. The alternative course — more difficult, as you imply: rebuild the fires among the citizens. A love of liberty and willingness to work the Republic’s engines.

    You have a point that, sometimes, “adjust the sails to the prevailing winds” is not a sufficient response. Life takes some flexibility but also some strength. Perhaps, at times, I adjust to new reality a little too quickly.

    Like

  22. patrick garrett permalink
    13 February 2010 9:40 pm

    I come to your website and learn just how much I have yet to learn. I am curious about my perception of America’s decline. The people who have been influencing America’s course through history seem to have been dreadfully wrong, or myopic. They all had more, and better, educations, than I have; how are people like myself supposed to survive what appears are fast approaching hard times? I would not know how to invest what little money I am able to make to just keep it safe from inflation eroding its value. I see no one of any political inclination who has the foggiest idea what to do about the economy, the two front war, or the rising, and hair raising threat from radical muslims. From what I read here, we are in some serious difficulty, our choices are all tough, and time is running short. Is it time to prepare a bunker to ride out a coming storm?
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    FM reply: Let’s take this by the numbers.

    (1) “The people who have been influencing America’s course through history seem to have been dreadfully wrong, or myopic”

    Whatever our problems today, I consider America to be one of the great success stories of history. Not perfect, not Heaven on Earth. But with a record that stands comparison with the best of humanity so far.

    (2) “I see no one of any political inclination who has the foggiest idea what to do about the economy, the two front war, or the rising, and hair raising threat from radical muslims.”

    I disagree. We have a superabundence of ideas and insights. We lack the wisdom to carefully sort thru them and the will to put one of the best (not necessarily the best) into action.

    (2) “Is it time to prepare a bunker to ride out a coming storm?”

    IMO no. Despite the hysterical antics of doomsters, history usually moves slowly. As Keyes said, there is a lot of ruin in a nation (i.e., a nation can take considerable damage before folding).

    Like

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