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October 01, 2008

Is There a Lesser Evil? (Personal)

For me, one of the more intriguing aspects of the current charade is the difficulty would-be commentators have in admitting the massive global economy we humans have evolved to nourish and enrich us is so riddled with dishonesty as to be functionally beyond the “control” of any one entity. 

That such dishonesty has always been characteristic of human behavior is a matter of record; written history can be reduced to a chronicle of the wars of conquest waged by stronger political entities against those perceived as weaker. 

Thanks to Science and the Industrial Revolution, the human population has increased spectacularly in the last two-plus centuries. It's now so large that the size and complexity of the economy needed to sustain it encourages a degree of corruption capable of destroying the confidence all markets require to function. Historically, the first market collapse with that potential was the Great Depression, a phenomenon that wasn't over until World War Two supplied the industrial stimulus needed to put everyone back to work. In a real sense, our modern world was critically shaped by two overlapping phenomena: the first began in October 1929, and the second ended in August 1945.

Most economists now agree the failure of the Hoover Administration to supply enough liquidity to the banking system triggered a credit freeze that critically exacerbated and prolonged the misery of the Great Depression. That several other factors such as the get-rich-quick mentality of the Twenties, the staggering lawlessness of Prohibition, and the environmental ignorance that produced the Dust Bowl also contributed to that misery doesn’t alter their belief that allowing credit markets to die was both a critical error of that debacle and one we are now in danger of repeating. 

Time is critical: businesses require that deadlines for payment be honored; once it has failed, a business can’t be resuscitated. Those dependent on its salaries are out of work and a pernicious domino effect has been set in motion. It was that simple principle those voting against the “bail out” didn't understand. There are encouraging signs that enough may now recognize their error and pass an economic stimulus in time; but their ignorance was forever recorded on Monday.

The end of World War Two triggered a global economic boom that began in America and quickly spread around the world, even as former European colonies were fighting wars of national liberation that became entangled in the politics of a forty year Cold War that narrowly averted nuclear catastrophe by only competing economically after the Cuban Missile crisis. 

Since the end of the Cold War in 1989, the substrate for global conflict has remained the glaring economic disparity between rich and poor; however boundaries are less national and more likely to be subdivided by religious and ethnic conflicts with even deeper roots. Quite apart from the difficulty of resolving religious issues through political negotiation, even more difficult problems confront world leaders: the internet has greatly facilitated both the propaganda efforts and the command and control functions of loosely affiliated terrorist networks. It has also made technology-dependent Western economies more vulnerable to inexpensive attacks.

Beyond that, widespread use of suicide bombing as weapon of choice has unsettling implications. Neither side in the Cold War saw suicide as either a weapon or a solution to earthly problems, thus the conflict could end when the destruction of the Berlin Wall symbolized the political break-up of the Soviet Union.

On the other hand, beliefs uniting Islam have, if anything, been strengthened by the warlike response to 9/11 adopted by the Bush Administration. Compounding the political cost of an unnecessary war has been the economic cost of the corruption with which it has been fought.

The American President to be chosen on November 4th is likely to be the most important in our history. The candidate who participated in the Viet Nam War and still thinks it should have been “won” clearly doesn’t understand either history or the issues. 

That he might actually win is almost as frightening as the possibility Congress may fail to rescue the economy before Election Day.

Doctor Tom

Posted by tjeffo at October 1, 2008 05:21 PM