November 28, 2012
The Federal Reserve pumps money into the system through its current iteration of Quantitative Easing whereby it is buying up mortgage-backed securities (MBS) in the secondary market, primarily from the Primary Dealer "community" (the "Friends" of the Federal Reserve which the Reservists "Like.") This is called "money printing" by the goldbug, libertarian community, which in a sense it is, but it is the only kind of money printing the Federal Reserve allows itself. Ben Bernanke does not want to produce "runaway" inflation such as would occur if the Fed purchased not MBS but actual mortgages from actual Americans. This latter approach has been suggested by many as a real goose to the economy: the Federal Reserve could simply buy up all underwater mortgages in the United States by printing the money necessary to refinance them at a value equal to the house's fair market value, while leaving the owner-occupants in place. Suddenly, a giant cohort of house-rich Real Americans would stand proud in their front yards.
Nope, can't do that. Bernanke is certain (and I'm certain he's right) that an economy stage-managed to that degree by the Central Planners would turn the American economic tragedy into a farce of hyperinflation. So The Bernank comes at the problem from oblique angles: holding down interest rates through Operation Twist (whereby the Federal Reserve buys up the long end of the Treasury curve), providing a secondary market for distressed MBS, and maintaining its Zero Interest Rates Forever program... forever, which starves the savers and retirees who might otherwise earn some money on their bank nest eggs, but this is an economy with many problems, and trying to fix some of those problems entails making others worse.
Thus, the salient point is at last reached: why do we have an economy where only tweaks and gimmicks are available for dealing with its many deficiencies in providing a general, prosperous standard of living for its citizens? Why do we have the general feeling that no matter what scheme we try next, we're going to remain mired down in this sluggish, sputtering contraption known as the American economy, in a fugue state similar to the conditions which have prevailed since 2007, when the wheels began to come off? When the Bubble popped? Choose your mechanical metaphor.
Sorry, that's all the time we have for today. Tune in next time when we ask some more rhetorical questions.
November 25, 2012
I don't know if I've mentioned before that I've been reading a book entitled American Mania, by Peter Whybrow, a British psychiatrist and current head of the Semel Institute of Neuroscience at UCLA. This is another look at "American exceptionalism," only one that makes a little more sense to me than the usual malarkey based on sketchy ideas about Americans having "inherited" the adventurous blood of their European, Asian, African and Latin American ancestors, those who braved the unknown to establish a new country, and et cetera, et cetera, et cetera, as the King of Siam said to Anna.
That always sounded like complete and utter nonsense. Every human not living in Equatorial Africa is in some way the descendant of just such an "adventurer," and the inheritor of genes passed on by those who came up out of Africa beginning about 60,000 years ago. Our narrative is simply a self-centered meme intended, as with so many things in the national lore, to make us feel superior. This yearning for superiority, of course, being the surest sign of insecurity.
Be that as it may: the question, as I would frame it, is along these lines: is there an explanation, scientific or at least rigorous in nature, that would shed light on America's tendency to mass produce Assholes? For example, can an explanatory theory cover such excrescences as Donald Trump, the Koch Brothers, Rush Limbaugh, Grover Norquist, the entire personnel lists of the Wall Street investment banks, James Inhofe and so forth? Why does America lead the way in creating humans who actively work, and in some cases devote their lives, to destroying the Earth as a viable habitat?
Dr. Whybrow, gentle soul that he is, and perhaps constrained by his foreign-born status, is much gentler in his approach. To summarize his thesis: as with other neuroscientists who have ventured into sociology, Dr. Whybrow notes the "layering" of the human brain; which is to say, the topmost layer, the cerebral cortex where all of the complicated ratiocination is carried on, is placed as a sort of sedimentary layer on more primitve structures, such as the "reptilian" brain. (For those evolution-deniers, another almost unique species mass produced by America, I would ask: why would God build a human brain, 6,000 years ago, that contains elements obviously retained from earlier, lower life forms? Why not just start from scratch, on this, His magnum opus?) Moving on: Whybrow explains that this reptilian brain, operating unconsciously, controls the drives for basic security in terms of food, sex and material acquisition. Because of the unique physical circumstances of the United States, a large and varied topography; favorable climate; plentiful water; great natural resource stores; isolation from older cultures which tend to destroy each other on a regular basis; and a progressive political system (until about 1980, when we chucked it all in), America leapt ahead into modernity and into production, exploiting this uniquely favorable real estate, on a scale never before seen in human history.
The reaction of the reptilian human brain to such abundance was natural and reflexive. Since this brain component evolved during eras of scarcity, when the struggle for survival was a daily grind (till we reached the Upper Paleolithic, our Golden Age), abundance is treated as an opportunity to make hay while the sun shines. We begin a frantic process ("mania") of material acquisition, power-seeking, sexual conquest, celebrity worship and envy, and other manifestations of a completely out-of-control venality and acquisitiveness. Since American culture venerates those, most of all, who are rich and famous (the King Reptiles), we elevate to national stardom the Total American Asshole, that specimen (such as Donald Trump) who most clearly epitomizes this sick maladaptation to abundance. Trump, indeed, with his grasping, palpable air of desperation and grandiosity, is perhaps the Poster Boy for American Mania. An essentially dumb, incompetent Lizard who inherited a lot of real estate and managed to keep some of it through serial bankruptcy.