Sunday, January 3, 2010

starting over for real this time, but not from scratch

I haven't posted on this blog for a long time, but will probably post ideas from time to time -- especially more spiritually oriented things.
The year 2010 is off to an interesting start. Several people I know had their New Year's Eve plans foiled, either by needless quarrelling, illness or simple miscommunication. I don't consider this a bad omen at all, but rather an indication of what the year will be like. It will be a year of challenge and obstacles, but also a year of triumph. Unlike in previous times when things fell together so easily in my life or the nation's economy, we are in a new era where we must carve out a new future and new circumstances. It will be fraught with some difficulty, but also great joys as we embrace aspects of ourselves we always knew existed but didn't use. Talents and strengths built in other endeavors will be used in completely new ways.
For the past 60 years, our country and culture have fallen back on the comfortable institutions born out of WWII: housing, higher education, highways and mass consumption. They served their purpose, but have become false idols that must now be replaced. Just as religions need periods of revival when they return to their real message and purge corruption and distraction, we as a country and economy must get back to the real messages of freedom and prosperity.
These cannot come from more government, which by definition can only act by taking people's liberty and/or wealth. (Think of any government action: All require as a philosphical necessity telling people what to do, or taking people's money. Taking liberty or taking wealth.)
With spirituality relegated to the privacy of individual lives, we have embraced government as the new religion. While few would place absolute faith in the actions of another human being such as a neighbor or even a spouse, our current policial philosophy requires complete and utter faith in the cumulative actions of all them.
People have sought out new absolutes: houses never lose value, a college education is always good, America will never default. We have built entire industries and financial systems around these beliefs, and millions of people have realigned their lives based on these principles. The housing bubble collapse should serve as a stark warning to everyone that these shared public morals are little more than mantras and slogans. They are built upon the sand of a country that had a massive savings glut and consumption shortage at the end of a great war. This false trinity of beliefs in housing + consumption, higher education and big government can traced to specific socio-economic realities in the 1940s that are no longer true.

Instead of embracing the sand of a bygone era, it's time to turn back to the real principles. In the metaphor of building on sand, the sand itself my not be permanent, but gravity is. In our economy, housing and education might not eternal, but profit is. For many years, profits could be made simply by building houses. It was a very solidly packed sand we mistook for bedrock. But it was still sand, and now it's coming lose.

In our own lives, we must avoid the temptation to deny reality. We must avoid the temptation to pretend the sand is bedrock. We must avoid the false comfort of repeating something that used to be true as if though it's eternally true.

The more I study economics or any other human endeavor, I realize there are only two absolute truths:
1-We're all going to die
2-Jesus loves you

It's not always true that low interest rates help the economy, or that a higher education is always good. We need to put aside this foolish and childish bromides and embrace the new reality of the 21st century.
The important thing to remember is that in 1850, a century before the post-WWII era began, there were no academics who argued for the merits of housing or higher education. These things grew out of the reality of 19th and early 20th century America, based on natural interests. There WAS a time when higher education was highly beneficial, and there WAS a time when the promotion of housing was an intelligent way to drive the economy.
But that time has passed. As an economy, we must raise interest rates so the bad banks fail and their mispriced assets are thrown onto the open market. Entire cities and municipalities must go bankrupt and hundreds of thousands of underproductive public-sector workers must lose their jobs. We must face the reality of the 21st century at a time of our chosing, or that reality will one day face us at a time of its chosing. Like an enemy that's allowed to rebuild after a defeat or a tumor that's ignored, this reality will fester and grow into a mighty wave of governmental dysfunction and public-sector insolvency that will destroy all liberty and all society. It must be stopped now before the inevitable happens and the United States defaults on its debts and money ceases to exist.
As individuals, we must stop embracing the convenient. We must stop taking emotional solace in superficial pleasures and those things that have sustained us in times when we were out of touch with our own hearts. We must find that pillar of iron within each of us, that innate core that we never wished to compromise. Instead of ignoring what really matters, we must embrace it and grow in a new direction based upon it. The old directions, like housing and higher education, are well travelled and putrid. We need newness based on the fundamental, just as Baudelaire described modernity.
This brings me to the weekend's heavy emphasis on Isaiah and Matthew:

Arise, shine for your light has come, and the glory of the LORD has risen upon you.
For behold, darkness shall cover the earth, and thick darkness the peoples; but the LORD will arise upon you, and his glory will be seen upon you.
And nations shall come to your light, and kings to the brightness of your rising.
Lift up your eyes round about, and see; they all gather together, they come to you; your sons shall come from afar and your daughters shall be carried in their arms.

In Matthew 2, we read of the wise men visiting the Baby Jesus. Kings from afar come to pay homage to the light. Mighty men of power of wealth subordinating themselves to a poor child in a stable.

So it will be in politics, economics and our own lives. In economics, light of real truth (profits) will cast out the darkness of government-imposed temporary truths (housing and higher education)... So it will be our own lives: The light of real faith and real values will cast out the darkness of convenience and habit. And so it will be in politics, where the eternal truth of the constitution will cast out the darkness of statism and unthinking government fiat.

We have lived as children for the past 60 years in this country. We trusted in simple truths like housing, higher education, big government (which implicitly means the USA can never default). We used collective definitions of value to avoid thinking: If you don't know what else to do, build a subdivision and a strip mall. If you don't know what else to do, get more education. If you don't know what else to do, buy Treasuries.

These beliefs kept us like children who don't have to fend for themselves because their parents are always there to help them... always there to kiss their scraped knees when they fall, or to pump trillions of dollars of "liquidity" into the financial system to "avert crisis."

How many parents want their kids to come back to them when they are 15, 25, and 35 asking for more bandaids? Indulging a child at age 8 is one thing, but coddling millionaires in fancy suits is downright immoral. It's equally wrong to treat adults as children, assuming they need someone else to provide them with food stamps, healthcare and unemployment benefits.

As St. Paul wrote in 1 Corinthians: "When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put childish ways behind me."

Bromides such as "economic stimulus," low interest rates and stimulus programs designed to keep state and local government employees in their jobs are childish things. It is not compassionate to treat adults as children, and it is not moral to shield grownups from the consequences of their own actions. Trillions of dollars worth of capital were misallocated in this economy. The people who did this must face the consequences of their actions.

They have been fleeing this reality for decades as government regulators and Fed officials coddled them with regulatory forbearance and easy money, licking their wounds with kindness rather than making them live in the reality inhabited by everyone else.

But truth cannot be avoided. It's time to put aside false gods and to draw upon the ultimate reality we carry within. It's time to stop doing the convenient and easy and to do what's true.

I pray to be a bearer of light in 2010. Like the mishaps of new year's eve, it won't always be convenient. But the truth is now clear in my heart. We are no longer children. It's time to retake our lives, our economy and our country from the forces of darkness. There will be setbacks and failings along the way, but I am now clear what must be done. I pray for all those who share with me, and for my enemies. So many of them are trapped in darkness. Let us be humble, honest and free of rancor as we strive to set them free.

"The people of darkness have seen a great light.
The Lord of our longing has conquered the night."

And so shall we.