The public has adopted a mob mentality. To say that they are angry toward financial leaders, big business and institutions is an understatement. Politicians and talk show hosts are feasting on the animosity. In the case of politicians, they are attempting to direct the mob against bankers and CEOs so that they can slip out the back door appearing blameless.
To me, having Washington politicians degrade anyone else’s failure is the height of all hypocrisy, as Washington has not solved any major problem confronting this country going on well past a decade now.
They also fail to show determination to overcome partisanship, preventing their ability to reach consensus on solutions to major problems.
Crowds or mobs lose the ability to rationalize information in any balanced intellectual capacity as a visceral emotional response short-circuits their ability to reason. There is a snowballing stupidity that dominates crowd mentality. In my life, I have learned from experience that anger makes you stupid. Some of the things that I regret the most, I’ve done or said when I was angry. When I see angry mobs and demagoging politicians, most don’t have their facts straight. They are not in a mindset to listen either.
The Great Recession of 2009 is, so far, being handled better than the Great Depression, but it’s not over yet. Some see the risk as being greater now because the scope of the global economy today versus back then, can magnify the effect of bad things just as much as it can share benefits.
Boom and bust business cycles and K-wave depressions are part of capitalism. While there are downs, the net benefits of capitalism far, far outweigh the bad.
Capitalism created the situation that we are dealing with today, but it will also produce the structure and means that will bring the next wave of human economic benefit to the planet.
In the 1930s, the banks failed so they wrote regulations and empowered a Federal Reserve system. It is human nature to leverage to the greatest degree allowed, testing limits. Regulation is a roadblock to this desire and effect. The river of human nature is so strong that it will eventually cut a new streambed around regulation.
This time, the FDIC banking system held sound.The problems occurred where regulation wasn’t focused.The market excess went where it did to OTC trade through investment banks to escape the regulation following the 1930s. We will now set down new regulations after this financial crisis, regulating to prevent the excesses that precipitated this financial crisis.
Yet, in 60 to 70 years and another couple generations, the Wall Street capitalists will find their way around these regulations too, resulting in the next financial crisis.
I would recommend that the crowd needs to cool off and new regulation go slowly. Actually, former Fed chairman, Paul Volker advised similarly. We need to re-evaluate, allowing for future growth, not only for past mistakes.
If we dam the river up entirely, we would drown in the lake. De-regulation is now seen as a villain, but it is the extremes that should be avoided so that we do not over-compensate with such regulation that growth is straight-jacketed. Only a few politicians will provide any value in this process.
Most of them aren’t smart enough to get it and others love to wave a pitchfork to incite mobs rather than use one to stack hay. The sooner they stop shouting and screaming, the sooner we can make hay again.
I love tea and were my government to oppressively tax its purchase, I possibly would be motivated to protest. I haven’t been to a tea party since my daughter was six, but I understand that they have become very popular lately. They organized a tea party as a populist protest here locally and 275 people showed up on the courthouse lawn.
Republicans usually scoff at populist movements, but are attempting to jump in front of this parade in an attempt to lead it. While the mob at these tea parties is not intellectually refined, they do express a common sense that any idiot can see that “spend and borrow” or “tax and spend” policies of Republicans and Democrats eventually lead to financial destruction.
Republicans profess to have the license on fiscal conservatism yet never practiced it when in office. These tea parties are protesting spending as much or more than taxes. It’s hard to argue that we are oppressively taxed today, but if they keep spending like they have, it’s hard to envision how higher taxes won’t be inevitable.
While tea parties are mostly organized by Republicans, they are disgruntled Republicans who understand that George W, with their party in control, doubled the national debt with spend and borrow, leveraging the country to the Chinese. These Republicans are almost as mad at Republicans as they are fearful of Obama compounding the fiscally leveraged legacy left by the last Administration with another wave of socialism.
Both parties spend with Republicans borrowing to cover the bad checks and Democrats taxing somebody to pay for it and borrow the rest. Being a Democrat or Republican appears to me to be nothing different than being either a termite or arsonist. Either way the building comes down eventually.
Tea parties reflect public frustration, but acomplish little else.
David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.
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