Great piece in the Financial Post. Brain is mush from a head cold so no bon mots from me on it at the moment, but it’s rich with insight.
The problem is, we do not have a casino economy. To borrow a metaphor from child rearing, we have a “helicopter economy.” Helicopter parents hover over their kids, preventing them falling and hurting themselves. This means their children never grow up and learn to see dangers for themselves. And for this very reason, such children will eventually fall in more serious and dangerous contexts instead, because risk is part of the human condition. The helicopter economy works in a similar way. The government hovers over the banks and investors, making sure they do not get hurt too badly (and cleaning up any messes they leave behind.) Whenever there is an accident, the benchmark rate is lowered, the central bank extends credit and taxpayers’ money is pumped in. The players never learn to look out for risks; they just continue their reckless behaviour, and sooner or later they will fall off a ledge that they were not watching out for and pull us all down with them.
Capitalism without bankruptcy is like Christianity without hell – it loses its ability to motivate humans to be prudent or respect their fears. If completely removing the safety net from under the financial market is not politically feasible, then it is necessary to make a division so that they protect only pared-down banks engaging in simple operations. All other financial institutions should be told in no uncertain terms that the government’s only responsibility to them, if they fail, is to wish them luck.
Brother Beaujolais Nouveau,
Recently, I came across a G. Campbell Morgan
quote, loosely paraphrased as follows
“Hell is Heaven’s safeguard, for who wants a God that does not separate evil from good, a deity that that would allow forever flaws in His eternal plan for perfection?”
I have so enjoyed your great mind and even
larger heart. Keep fighting the good fight.
You do it so well.
Your Brother In Christ,
Ron White
By: Ron White on October 18, 2009
at 5:16 pm
Just got back from a national gov. trade show – exhibitors were down by 30%, attendance down by 30%, conversations were about the economy. Not a good show.
The next one will be telling – it’s private enterprise.
By: Left Coast conservative on October 17, 2009
at 2:43 pm
I don’t know how to say this, or where it belongs, but I feel like I’ve got to say it. I’ve been a successful Realtor for the past 20 years. It is the nature of the beast that Realtors “always” try to impress the public with how great the market is doing. I remember from my BH&G marketing classes that we were instructed never to let people think we weren’t busy. What a joke! The weird thing is, Realtors are still doing it. God sat me down 18 mos. ago as a result of being taken off of medications with adverse side effects that I had been taking for parkinson’s disease. Since then, I just haven’t had the heart for the job, so I can see people trying to convince themselves and the public that all is right with the world. Let me tell you something, folks, all is not well in the real estate sector, the financing sector, the banking sector, not to mention the automobile sector and how many others. I can watch it all pretty dispassionately now. I see how few listings are coming in, how few closings there are, and my phone which used to ring continually is as quiet as a mouse unless some desperate home owner finally decides to bite the bullet and take a loss. Buyers made a run in the last two weeks of September trying to make sure they get to take advantage of the first time home buyer tax credit, but now you don’t see hide nor hair of them. Maybe it’s different elsewhere, but I don’t think so. I see the looks of desperation (which people think they can hide) on the faces of those agents who really have to sell homes to make a living. What’s that old song…smiling faces sometimes lie or something like that. I think a huge percentage of this economy is bankrupt and everyone’s trying to keep their neighbor from knowing about it by pretending that all is well, and the people in Washington are most assuredly the most guilty of all! Did any of that make sense? Sorry. (Stepping down off soap box now.)
Kim
[Thanks for sharing, Kim. I like front-line perspectives because they're at least fresher than big broad-brush analyses. I know you didn't ask for it, but if folks pray for your Parkinson's, I assume you won't mind? - ed.]
I
By: Kim on October 16, 2009
at 3:06 pm
Uh, I hate to jump from the sublime to the ridiculous, but we do not usually ‘reinfect’ ourselves with a cold, because we have become immune to that virus. At my age, almost fifty nine, I am immune to many if not a majority of cold viruses. I sometimes start to feel as though I am coming down with something, and it goes away, even if I do not eat Cold Eze. Since I do not have any other hypochondriacal tendencies, (rather the contrary, unfortunately) I assume that my immune system has revved up and eaten another virus.
Hope your cold is eaten very soon.
[The nurse has weighed-in. Case closed. Too bad too, because I had fun boiling my toothbrush just now.
-ed.]
By: Michael on October 16, 2009
at 10:54 am
[...] H/T New Wineskins [...]
By: Great piece on the meltdown « The Quick and the Dead on October 16, 2009
at 7:51 am
Art,
I have been reading and listening to Nassim Taleb, the author who wrote “The Black Swan”.
I have been thinking on the subject out of a christian context and it has been very interesting.
God moves through the world in ways we cannot know or anticipate (except through prophecy).
The cross is the ultimate “Black Swan”… those who were right there and living with Christ and saw him perform miracle after miracle and knew him as devine… still didnt get it. Know one knew what the cross meant until it happened. Even with given prophecy it appeared to be unknowable. The Messiah was anticipated but know one actually knew how the redemption plan would actually unfold except God himself.
Just thinking…
Bill Henry
PS… sorry this was a little off topic but the thought of the economy and how we are in the midst of a “Black Swan” type event right now… means that what the future holds… (meaning the events until the return of the King)… become increasingly unknowable. Not sure what this all means.. still thinking… but for right now it just is..
[Not off-topic at all, Bill. Good insights. In my day-to-day work I try to get clients to make a clear demarcation between that which can be reasonably anticipated and forecast (because things like it have happened many times before) and the many other things which will, by definition, be surprises.
It's when we try and put everything into the former category (either through statistical methods or, as I'm guilty of doing from time to time, stretching prophecy until it breaks) that we run into trouble. -ed.]
By: Bill Henry on October 16, 2009
at 1:13 am
[...] Capitalism Without Bankruptcy; Christianity Without Hell « New Wineskins newine.wordpress.com/2009/10/15/capitalism-without-bankruptcy-christianity-without-hell – view page – cached Great piece in the Financial Post. Brain is mush from a head cold so no bon mots from me on it at the moment, but it’s rich with insight. — From the page [...]
By: Twitter Trackbacks for Capitalism Without Bankruptcy; Christianity Without Hell « New Wineskins [newine.wordpress.com] on Topsy.com on October 15, 2009
at 11:59 pm
I always thought this whole ‘bailout’ was just our money being used to prop-up failing banks.
Art – Be sure to change your toothbrush after about 3 days. A nurse once told me you are only contagious for the first 2 days of symptoms. Another lady on the radio said to change your toothbrush because otherwise you’ll just re-infect yourself. Now I always change the toothbrush after that 3 day window. I’ve never had a cold come back after I thought I was over it.
[Thanks, Anne. Drinking hot beverages and sitting by the fire here on a very chilly/raw December-like day in October. Maybe I'll microwave and/or boil the toothbrush... hmm... -ed.]
By: Anne on October 15, 2009
at 10:11 pm
“Capitalism without bankruptcy is like Christianity without hell”
EXACTLY!!!
My bank is doing loan workouts/modifications and everything about them rewards bad behavior and eliminates the risk associated with the idiotic choices so many made in pursuit of GREED!
[On reflection, it seems that greed is not the problem per se. It is not good by any means, but due to fallen human nature, down here, it's a given -- regulation or no.
The problem rather, seems to be that greed gets an extra-large playing-field in which to romp when risks are reduced or eliminated artificially. People don't have to consider common-sensical, harm-reducing questions such as, "is this upright?" or "could I lose badly?"
In a Christian context, the same thing applies. I've been in churches where everything was all nicey-nice (no mention of hell or God's wrath or final judgment). The "downside" of our free will choices was never talked about. In those places, Christ's sacrifice was turned into a license for doing whatever one pleased rather than as the focus for on-your-face gratitude, thanksgiving and repentance in awe and wonder. -ed.]
By: Armageddon Thru To You on October 15, 2009
at 9:30 pm