Can Americans Run Their Country?

The sordid details of the national financial crisis of 2008 (and continuing) caused by an utterly corrupted financial/political elite manipulating millions of greedy suckers should now be well understood, in its broad meaning, to all: Washington coddled, protected, rewarded the billionaires by stealing a nearly infinite amount of cold cash from everyone else. (If you still have not read a single book about the moral corruption that powered this theft of your money, Michael Lewis’ The Big Short is a brilliant and brilliantly entertaining place to start.)

 

Washington’s behavior of rewarding the guilty thus ensured a repeat performance, and, sure enough, we are already in the midst of yet another meticulously planned bubble (this time the stock market, booming not because American industry is booming but because the U.S. financial system remains consciously, intentionally designed to give your earned income to people who do not believe in earning theirs).

Surely, the financiers who pulled off this great theft and the bought politicians who facilitated it would have preferred that it all be swept under the rug, but the sudden impoverishment of millions of workers and the sudden foreclosure forced upon millions of homeowners plus the very public collapse of Wall St., followed by the stunningly socialist and utterly anti-capitalist corporate welfare response from Washington somehow leaked into the mainstream media. Thus, the criminality/irresponsibility/idiocy (pick A, B, C or all three) of the financial elite and our elected representatives regarding how to manage the nation’s economy has been neatly exposed.

All that is old news but important, for it proves that the elite was incompetent as regards one of the three key duties of being in charge, i.e., the economy, and thus raises the very serious question going forward of whether or not the elite is remotely qualified to run the other two equally important and even more complicated areas of governance: national security and the natural environment. No doubt anyone patient enough to read this far has already noticed for him- or herself sufficient evidence of foreign policy and environmental problems to suggest that this question is more than just theoretical.

Much has been made since 2008 of the utter blindness of the computer models used on Wall Street to calculate risk. All you really need to know is that these models were based on the assumption that the only possible outcomes were outcomes similar to those of the recent past. Wearing these rosy glasses, those models proved that everything being done on Wall St. c. 2004-2007 was virtually risk-free (for them; who wants to model poor people buying no-cash mortgages???). Not only did these very “sophisticated” and expensive models dismiss the possibility that something never before seen could occur (even when Wall St. had reinvented itself into totally new financial vacuum cleaner with CDOs and CDOs of CDOs, all based on liar mortgage loans) but these models even dismissed the possibility that the 2005 bubble could be just the latest in a series of financial disasters that had already occurred A. in recent decades and B. in the U.S. (e.g., the savings and loan crisis, the collapse of LTMC, the dot.com crisis). No news there, either, but just consider the nature of the models underpinning U.S. foreign policy and U.S. environmental policy (not, please note, political science models or scientific models about global warming, which are carefully ignored in the making of high level U.S. foreign and environmental policy).

U.S. foreign and environmental policies are not based on computerized models at all…just “mental models.” The core mental model for U.S. environmental policy is that we humans own this world and nature is our servant: take what you want and Mother Nature will make all the poisons we throw on the ground and into the air and water simply vanish. The core mental model for U.S. foreign policy is the “realist” view that since the world is a nasty place, if we want something, we should take it. Blackbeard was a “realist.” Occupying Iraq and isolating and finally surrounding Iran were “realist” policies. Now we suddenly need Iran’s help to fix the mess our “realist” invasion of Iraq created but unfortunately we just spent the last three decades using our “realist” policy to teach Iran that we cannot be trusted.

Even with enormously complicated computer models, the highest paid people in the world did not have a clue about how to run the financial system for the benefit of society (and, in fact, they would have sunk their own pirate ships, had Washington not handed them the greatest example of corporate welfare ever known). But the models underlying Washington’s core policy stance on managing national security and the environment are essentially no more than outdated prejudices kept around because they so conveniently portray decision-makers as innocent of causing any of the national security or environmental mess that just “happens” to be popping up all around us. Not only is no one to blame for the poorly designed and badly tested equipment that poisoned the Gulf of Mexico, but it doesn’t matter anyway since Mother Nature will absorb whatever poisons we feed her. The U.S. has a heavily militarized foreign policy not because the ruling elite uses war to enrich itself (in a classic but typical elite conflict of interest, during the supposed crisis after 9/11 a CEO of a U.S. arms producer who had campaigned in favor of invading Iraq earned $25 million a year) but because everyone else in the world is so unreasonable that “they only understand the language of force.”

We did not do it. We did not design a financial system to promote liar mortgage loans or to carefully conceal them in worthless packages rated risk-free for the express purpose of defrauding investors…well, OK, perhaps that one time. But we did not invade Iraq in order to launch a wave of highly remunerative imperialism called the New American Century nor did we design an energy system to maximize short-term gain at the expense of long-term environmental destruction. No, sir! Our rulers are professionals…and smart…and patriotic, “Masters of the Universe,” you might say. And anyway, who are you to suggest that they could be guilty of such anti-social governance?

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