Preamble
What can a president do in a troubled economy? Anything except work magic to revive it. Matters of ‘economics’ lend not to such supernatural sleight of hand. To exit the bad times, a president must work the numbers. He has to plan. And then pray. Because matters of ‘economics’ are not responsive only to the pragmatics of planning and the empirical realignment of numbers.
A president –in addition to planning- must set out to reassure the people. To let them know they are in good hands. And that he is on top of the situation. Even if, in the meantime, he is not. The president is like the paddler of a boat in troubled waters. He cannot afford ‘panic’ amidst the tempest of roaring waters. There is a 50-50 chance of surviving the elements of nature; but there is hardly any chance of surviving ‘panic’ on board. The boat can capsize.
Thus the psychology of surviving bad times is as important as the economics of it. If not more important. America’s Franklin Roosevelt during the Great Depression of the 1930s knew this the hard way. With panicky Americans huddled around their radios every day to hear from their president, Roosevelt knew better than to befuddle them with ‘economics’. He reached instead the psyche of a despairing people in the language of ‘hope’ and not the gibberish of micro economics.
Roosevelt, even at the Depression’s bitterest point, assured a despondent America ‘I got your back’. And he told the Americans they had nothing to fear. If anything, he said, “The only thing we have to fear is fear itself”. And although the Depression lingered six more biting years since Roosevelt spoke, plus the efficacy of his exit plans was a subject of intense debate, Roosevelt’s success in restoring hope and confidence to America was never in dispute.
In 1992, the bad economic times visited America again. Democratic candidate Bill Clinton was just angling to return the presidency back to his party. An incumbent President Bush Snr was battling to keep it for the Republicans. Yet neither Bush nor Clinton had offered credible ideas about how to get America out of the woods. Contrary to axiomatic wisdom Americans ditched the devil that they knew, Bush, and settled for the saint they did not, Clinton.
Bush had ignored the lesson of Roosevelt in troubled economic times: not to ever engage the minds of the people with ‘economic jargons’; but rather to reach their hearts in the language of ‘hope’. Bush offered ‘information’ to Americans -by way of a 29-page economic jargon titled ‘Agenda for American Renewal’- when he should simply have given ‘inspiration’: first to admit he knew how much it hurt; and frankly too how it could even hurt more. But then he should tell Americans with all the rhetoric at his disposal how it was inevitable that America would once again overcome. Bush went around instead saying that the recession was over even when the recession had just begun.
An upstart Clinton, not because he knew any better, turned and twisted Bush’s knife-in-the-wound when he said that his incumbent opponent had mid-wifed the worst economy “since Herbert Hoover” (the ill-fated president of the Great Depression). That was not entirely true. America had had many bad economic times since Herbert, and long before Bush’s. America is no stranger to the ‘bad times’. In truth America is home always to the ‘bad times’.
Voodoo economics
Even the world’s acclaimed quintessence of the ‘free market’ system, namely the American ‘economy’, is not entirely immune to the vagaries of the voodoos of capitalism. And so it has always been for other capitalist economies, of the West and of other climes -so much that it can safely be said that ‘periodic slumps’ have become the veritable hallmark especially of ‘vibrant’ ‘free market’ economies.
In fact economists often warn that whenever an ‘economy’ beats all predictable odds to ‘bubble and bubble’, we should watch out soon for the ‘burst’! Meaning that no matter how well or poorly run, capitalist economies essentially are prone to ‘boom and bloom’ sometimes, even as they are at other times, inexplicably susceptible to sudden ‘doom and gloom’.
Sometimes even doing the ‘economically-needful’ may just be what it takes to slip into a ‘slump’. Or so said the U.S. economist Alan Greenspan: “Even (as) a moderate rate of ‘IN-flation’ can hamper economic performance, (so can) moderate rates of ‘DE-flation’… most probably lead to similar problems”. It is thus immaterial that the best brains are on top of it, any ‘capitalist economy’ -even with the cleanest ‘bill of health’- can still sooner be in the ICU (intensive care unit) than a man with a ‘heart attack’.
Said Frank Borman, U.S astronaut and business executive: “Capitalism without bankruptcy is like Christianity without hell”. It is almost a ‘given’ that capitalist economies are doomed to such a state of flux for the reason that selfish, conniving man will not allow the earthly affairs of humanity to take their natural course. Said E. F. Schumacher, an economist: “Modern economic thinking…is peculiarly unable to consider the long term and to appreciate man’s dependence on the natural world”.
Man has deliberately created a Frankenstein system of economy and to whose unpredictable monstrosity even he, has become a perpetual victim. But these ‘unpredictable monstrosity’ man chooses to call ‘market forces’ rather that what it truly is, ‘forcing the market’. ‘Market forces’ are the soulless factors that reward ‘opportunism’ and often punish ‘industry’. Yet they are celebrated today as the defining criteria for ‘free trade’ -ironically in a fast globalizing world that is gradually but assuredly slipping into the command control of vested interests. Free trade is not necessarily as free.
Such is the craze now about the dogma of ‘economics’ –like the self-harming creed called ‘rule of law’- that Schumacher, in lamenting man’s naïve submission to the vicissitude of ‘economic’ forces, said: “Call a thing immoral or ugly, soul destroying or a degradation of man, a peril to the peace of our world or to the well-being of future generations; as long as you have not shown it to be ‘uneconomic’ you have not really questioned its right to exist, grow and prosper”.
Nor can the global media be said to be innocent –advertently or inadvertently- in this unfolding conspiracy to hand over the world’s resources to the command of vested interests. John Maynard Keynes, the British Economist, in his ‘Essays in Persuasion’ wrote: “editors all bloody and blindfolded, still piteously bow down before the free play of economic forces”.
Theocratic economy
The undoing of modern democratic capitalism as a system of economy is traceable to its deviation from the path of its theocratic origin. When Jesus -in the Bible- stormed the house of God to chase out that era’s ecclesiastical ‘bureau de change’, he captured in one singular action the notion of a world economy envisioned by God which -of a necessity- must be non-usurious if it is to be free from the exploitation of the many by the few.
Islamically, the object of theocratic economy has been to leave the windows of ‘profit’ and ‘loss’ widely open. So that all who go into business transactions are exposed equidistantly to the possibilities of either making ‘profit’ or registering ‘loss’. Because in reality ‘business’ is about the only game of chance that religion can be said to have permitted. Unfortunately democratic capitalism with its concept of so called ‘risk-free’ investment, promises –albeit deceptively- to shut the window of ‘loss’ -for good- and to leave the window of ‘profit’ –permanently- open.
And herein lies the venom of the capitalist system. The very point at which man defied the transcendental order of ‘godly economics’ to install ‘usury’, was the tipping point that returned man from the path of bliss intended for him by God to the path of self-imposed drudgery! Naïve man gleefully subscribes to life insurance policies, paying premiums all his life in the hope, ironically, of making a ‘killing’ -even after ‘death’. Yogi Berra, the American base-baller known for his witty barbs mocked at this capitalist greed when he jived: “I took out a big life insurance policy because I want to be rich -when I die”.
We believe that by ‘saving’ or ‘investing’ in a so called risk-free, interest-yielding, capitalist businesses today, we have outsmarted Jesus by feigning a moral rebuff of ‘usury’ only to celebrate ‘interest-taking’. Modern man believes that like the soulless ecclesiastical money-merchants of Jesus’ time, he can multiply his estate without lifting a finger. And yes, in reality we seem to make some fleeting gains in insurance, stocks, mortgages etc. But all of this gain inevitably aggregates to a national burden which the system –being risk-free- has to pass to the larger economy; and upon which in the long run, all our fates are hung.
In fact “The trick now” as Alan Clark even put it “is not to live off the interest on one’s capital, but off the interest on the interest”. So that to the exclusion of existing goods and services, ‘money’ now grows ‘money’. We rejoice always at the prospect of reaping where we did not sow. But truth is the curse of unearned ‘gains’ always awaits us all. Because in reality interest-making upon which the free-market economy derives its oxygen bears always a transcendental curse.
Jesus was quintessentially a better economist than Adam Smith. Because even as far back, he knew that if money – without a concomitant growth in goods and services -was allowed to incubate money; and currencies to hatch their own kind, there would be as many ‘false economies’ as there would arise false christs and false prophets.
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