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Sunday, November 20, 2011

The Impossible Numbers


Some political systems are based on beliefs and identity. The American congress is built on spending money. The spoils system long ago became the spoiled system with money as the lubricant of politics. The legacy of a leader used to be measured by his accomplishments, today it’s measured by how much money he managed to extract from the collective pool of real and imaginary money held in the sweaty hands of the legislatures.

Much of the money is imaginary, but in the minds of the politicians it’s all imaginary. Unreality is an elementary tool of price inflation. The more outrageous the markup, the more the merchant works to create an atmosphere where money does not seem to exist and reality bends at the seams. It’s not a new game of a particularly clever one, but the unreality bubble now covers much of Washington D.C.
In the unreality bubble, numbers don’t really mean anything. 2 + 2 does not equal 4, sometimes it equals 1, sometimes a 100, sometimes any number you want it to be. Philosophers have spent thousands of years proving that nothing is real, but until recently they were not being employed as economists.

The clever are particularly adept at deception and at self-deception, treating reality as if it were as malleable as language. Objective reality can’t be manipulated with language, but subjective reality easily is. And each manipulation only increases the perception of unreality as the reality gap widens between the out of touch, who also happen to be in power. 

Spending is momentum. It’s also privilege. Wealth is power and the ability to spend unlimited amounts of money is rather disturbingly close to absolute power. And absolute power not only corrupts, it also blinds and distorts. 

The political elite have confused their power over their own subjective reality with control over subjective reality. That is how we got to 15 trillion and given the willingness of much of the disaster that passes for the global economy to participate in the debt funded planned government economies springing up from China to Turkey to the United States, there’s no limit to how much money we can spend except the collapse of the system.

So the failure of the Supercommittee should be no surprise. The Democrats have only one election strategy and that’s to blame the Republicans. They have nothing to gain from cooperation and everything to gain from conflict. They would see the economy burn, even if they didn’t have anything to gain from the flames—but they do.

Hypocrisy abounds on the Republican side where symbolic votes cover a multitude of economic sins. And when he symbolic votes tank, then the masks come off. But why expect anything different? The United States is not a one party system and congress can only be held hostage so far. The Republican Party is not innocent, only comparatively less guilty, their crimes those of greedy and complacency, rather than the ideological agenda that fattens up the spending of the left.

Everyone talks cuts, but no one makes them because cuts are a dangerous thing. Elections are expensive and someone has to pay for them. Indirectly that someone is the poor schmoe sending off money to D.C. without getting anything for it but aching fingers. 

There is a base for cutting taxes, but cutting spending alienates almost all the bases. Real spending cuts would gore everyone’s cow and the congressmen and senators who listen to pleas, demands and pitches day in and day out know that better than anyone else. They know that spending cuts are a thankless task and that for every target that gets applause, there will be two that evoke discomfort and one that brings out horror and disbelief. “You can’t cut that.” And you can’t.

It’s much easier to indulge in impossible numbers, to borrow insane amounts of money and pass on the debt to the tenth generation. Let them figure it out. And why not. It’s only money and congress has been spending increasingly insane amounts of it year after year.

The bigger the system, the harder it is to hold anyone accountable. Bureaucracies don’t correct failure, they falsely report success up the line. That’s how the Soviet Union went into a deep decline without anyone ever realizing it. When everyone is inventing impossible numbers and claiming success and the reporting system has an interest in not questioning the ridiculous claims of 92 percent harvests while bread is impossible to find, then before you know it you’re chewing on straw and calling it delicious.

15 trillion is a wake up call for people who can count, for most of congress it’s just a bunch of zeroes which don’t become any more perilous with addition. Congressmen who aren’t impressed by a billion aren’t going to be impressed by a trillion. A quadrillion? Why not. It’s all mostly zeroes anyway.

A political elite that no longer knows the difference between driving on premium unleaded and running on fumes can’t see anything wrong with the arrangement. They’re part of a system whose spending momentum runs in only one direction. Sure they could try to drag the massive budget boulder back up the mountain and then pare it down, but it’s easier to stand back and let the good times roll.

In this the political elite mimics their financial services industry counterparts. The left shouts about Glass-Steagall, but they are counting on the government to rein in the banks. And who will rein in a government which spends so willfully that even the most irresponsible investing strategy seems reasonable by comparison? If the government is supposed to watch the banks, then who will watch the watchers?

Corruption is one side of the problem, but that explains how we got here, not why we’re still here. To do that you have to get into the head of a Madoff, a man who knew better than most the futility of his financial scheme and yet kept digging himself in deeper and deeper. Whatever tragedy there is in the hubris that made it happen is more than amply present in the government.

Like Madoff, there are men and women in the government who know full well the path that they are on and do nothing about it. Like him, they likely vacillate between hubris and despair, bouts of self-loathing giving way to explosions of public arrogance. But they also know full well the futility of action.

Once Madoff’s scam became uncorrectable, when it was no longer possible to pay out the investors and move on, then the man and the scam became one. There are men and women high in our government who have reached the same conclusion, who have decided that it is too late to reverse the damage and so they might as well ride the bottom all the way down.

Amid the spectacle of their retirement dinners and awards, the civic speeches and noble sentiments, they know full well what they have done. Knowledge such as that carries its own price and shapes actions. The man who believes that he is living in Eisenhower’s America or Weimar Germany will behave differently.

The choices we make derive from our morality, but they also emerge from our hope for the future. When there is no hope for the future, then corruption is the only way. The reign of the hapless and the hopeless becomes a way of life and while endless plans are made, no one believes that they can or will succeed. Leaders become glib scam artists endlessly practiced at reassuring the public that everything is fine. But inside they are hollow men who have already abandoned the future.

This is not the face of the majority of our congress, much of which still has faith in impossible numbers, but I suspect that behind the dour faces of more than a face long serving senators is that knowledge and its attendant despair. The men who have decided that 15 trillion is an irreversible debt or those who think that money is abstract are equally likely to behave irresponsibly.  

Excessive naiveté or despair both lead down the same road of irresponsible spending, and whether the authors of the bills spend because they do not believe that money is finite, or because they know all too well that it is, the results are the same. 

But even this is too much for many elected officials who have not put this much thought into it, who follow the system and do what everyone does and avoid thinking about what it is they are doing. They admit that the debt seems high, but there are always reasons why their district can’t lose anything when there are so many other programs in so many other districts that need cutting.

Adversarial apathy is an equally sure path to the same road, but it lacks the pathos of tragedy, it is as vulgar as a mob fighting over a discount sale. Pork is the engine of this machine and as long as the fat burns, then the politicians will cluster to grab a slice. And why not? They know their jobs, not to be leaders but to serve as intermediaries for the special interests back home. If their predecessor got it for them, then they have to get it also. And when the corporations come calling, a little crony capitalism never hurt anyone and helped their chances when moving up the ladder.

It’s not really numbers that are impossible, it’s people. You can play any game with numbers so long as your game has consistent rules. And so long as you don’t believe that those rules govern reality. But the rules of the game being played with the future of the country are not consistent, and even if they were, you can only buy real commodities with impossible numbers and imaginary money until the sellers stop taking play money.

7 comments:

in the vanguard said...

Like I say elsewhere
(http://hezbos.blogspot.com/2011/11/rise-and-fall-of-israel-america.html)
"The dollar is now hanging on fingernails only because it is artificially propped up, to assure another win for Fascist Obama in 2012. Once that happens the dollar will plunge precipitously and the dollar bubble will have bust, with all its trillions in circulation temporarily backed by nothing but false statistics and co-conspiring media lies. Once the mannequin now in power wins again, the dollar will die a quick, ugly death."

careyrowland said...

Dear Daniel,
You're making this up, right?

Master of Obvious said...

True. True. Unfortunately the government accurately reflects the current will of a majority of the electorate.

Hello, can we get off this train? I would like to challenge the Sultan to tell those of us who are in violent agreement with respect to the current situation what we should be doing. What to do? Where to go?

To me the situation is obvious. What one person / family can do to survive the apocalyptic future is the hard part.

Sure seems like all roads lead to Rome. And we all know how Rome ended.

John K said...

"The more outrageous the markup, the more the merchant works to create an atmosphere where money does not seem to exist and reality bends at the seams."

That's the Amway success formula. Unfortunately as Americans have rejected it, they have found an overseas demand where people are just glad to have a source of American products and there is kind of an elite chic to having expensive things.

"Bureaucracies don’t correct failure, they falsely report success up the line."

I once had a friend who was a Staff Services Analyst whose job was to analyze the unit and report his recommendations for how to reduce the size and expenses of the unit. Unfortunately the head of the unit was also his immediate supervisor, so instead he had to write all his reports to justify the size and budget of the unit.

Lemon said...

The economy can be fixed if all debt is forgiven and we go back to square one.
It is that simple

John K said...

"The economy can be fixed if all debt is forgiven and we go back to square one."

The trouble with that is that we don't own our own debt. I haven't seen the figures for a while, but huge amounts are owned by China and others, maybe half.

We could default. Would that mean war?

What about WWII debt. We never made collection efforts on what other countries "borrowed" from us so they could help us win WWII.

Francis W. Porretto said...

"Bureaucracies don’t correct failure, they falsely report success up the line."

Robert Anton Wilson called this "the SNAFU Principle." His most compact formulation of it was: Communication is only possible between equals. His demonstration: "A man with a loaded gun will not be told anything that might make him pull the trigger." This applies with special force to the behavior of bureaucrats and bureacracies.

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