“Look, the economy has no clothes“, we marvel as we watch unemployment grow, watch our life savings evaporate before our eyes, and see crisis after crisis evolve.

“What? ” you protest. “Things can’t be that bad. Don’t we know more than ever about running an economy. Surely this is really just a minor bump and those in charge will fix things! In fact aren’t things starting to get better.“

Oh yeah, you go on believing that fairy tale and while you’re at it buy some swamp land in Florida to retire on. As Abe Lincoln once said, “You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.” Maybe so, but apparently you can fool the people for a long time, long enough it seems to create an economic disaster.

“Well,” you may note,”things can’t get any worse. Congress is taking steps to get the economy moving again.” I wish that was true but exposed and naked the economy’s always apparent warts and wrinkles seem insignificant compared to the cruel flaws now sadly visible beneath the veil of arrogant self-delusion (ASD^note). Sure congress has temporarily papered over the banking crisis but it is still with us and do you really trust the voices in congress that created this mess to fix it. And the fix they implemented has a silent time bomb called inflation waiting to explode our economy into fragmented little pieces! Tragically, it has become painfully clear that the economy crafted by a generation of politicians and their economic advisors was all a sham. In either their greed or ideology, and forgetting history, they have undressed the economy, removing its vesture by dismantling the historical economic framework erected by our ancestors by dint of painful experience.

Gone are the banking laws create during the great economic depression of the 1930s to prevent the kind of banking crisis we’re currently experiencing. Gone are the security laws crafted at the same time. Gone are the regulatory restrictions designed to prevent excessive speculation in our securities and commodity markets. Slavishly repeating the dogma of supply and demand as justification for dismantling market restraints even when that condition obviously doesn’t apply we have created an unstable economic monster (remember how oil prices artificially shot up via speculation and how painful that was for many of us).

In our collective ASD we just assume that the mistakes of the past can’t happen again. That somehow we have learned critical lessons from the past to prevent future crisis. Baloney! Human nature is human nature and that kind of gut experience seldom lasts more than a generation or two. As greed, arrogance and ignorance creep back into the system suddenly we again become pray to the all too human foibles of afflicting our modern economy.

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Tags: Economics, free trade, politics

This entry was posted on Sunday, May 24th, 2009 at 6:43 pm and is filed under Economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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