Holte's Corner

I was listening to C-SPAN this morning and they were asking the wrong question again. Their question was “Should companies be too big to fail.” There are a lot of questions to be asked, but this is one that is a tautology. Almost nobody believes that a company should be too big to fail. That idea is shared left and right, center and fringe. What is goofy is to translate that to policy without asking the right questions:

Why, How do we get Companies that are too big to fail?

What is it about international finance that might make large companies necessary?

Is the problem the company, or the company playing a role it is not designed for? [Which leads to constitutional questions in the original meaning of the term].

Is it the size of the companies or the constitution of those companies?

What is it about the culture of these companies that makes them more likely to fail than they should be?

Why is our economy so incredibly unstable, perniciously risky, and cyclical?

What causes asset bubbles?

Why are company officers able to convert “Other People’s Money” to their own salaries and bonuses and not held accountable when that money is lost?

Why does our society have a record of repeated massive frauds dating back to the 1790′s?

Why do, many times, the perpetrators of those frauds get impunity from prosecution?

How did these white collar thieves manage to create abstract (and often totally fraudulent) derived assets from whole cloth, and then find a way to use those “fine silk” assets to get their hands on real assets and sufficient wealth to make themselves individually incredibly rich — and then manage to hold onto that wealth after they got caught? Was the Emperor too embarrassed to admit he’d been fooled by their propaganda and had been naked all along?

I could go on, but our problem as a society is that we aren’t asking the right questions, and thus we get doctrinaire, stale, and often convenient answers to the questions we do ask. Right now we have Republicans are running for office promising to never bail out another failing company. Yet, you hear no talk about anti-trust, trust-busting, or what happens when a Giant Company does fail. At the same time we hear a lot of complaints about Company Officers who managed to make money both from defrauding their stakeholders and from the bailout provided to keep their companies functioning, and yet no systemic solution is offered other than a promise to “let them fail” which is the absolutely most risky and pernicious solution that could be offered. At CSPAN there were people who laid out the cascading effects and interconnectedness of the results of letting a giant interconnected company fail. We created the FDIC and Bankruptcy Courts to deal with systemic risk, but the reason for TARP is that these giant Financial companies had the power to bring down our economy — and indeed even with TARP that is exactly what they have done.

I’ve been talking these questions, and some tentative answers, because I’ve been about one of the few people asking them. The question of “Two Big To Fail” is the wrong question. The real question is, how do we manage risk and protect ourselves from risk takers who are misusing our money to enrich themselves.

Corrupt Practice seems to invalidate the underlying principles

When the trains aren’t running, someone who can get them running on time seems a hero. People are drawn to principles because they have some sort of utility. The reality is that our principles set a basis from which we can figure out how to see things in a utilitarian way. They define our personal and social boundaries at a conceptual level. At the same time, being human, we test our principles against reality.

One of the observations of the early 20th century that really corrupted politics, was the observation that people behave like Animals, that they lie, cheat, steal, and that for all the efforts to create a more enlightened society — and for all the posturing by societies “elites” about their superiority as human beings, these failings continued. For a time Naturalist writers even celebrated these brutal attributes of society, writing books about wolves and fighting dogs, Eskimos and Indians. But there was nothing funny about it, and the carnage of World War I only reminded people of the tremendous inhumanity of the system even as moderated by such “liberal” attributes as Education, Universal Suffrage, Democratic Voting, and governments with legislatures.

The reality of human practice corrupted the theories that guided human politics even as the authors of those policies claimed to be aiming at restoring order and bringing a more humane world order. Communism seemed to offer hope to people thoroughly discouraged by the performance (anti-performance) of Capitalism and dysfunctional European Governments. On the other side of the aisle People forget that Mussolini won in Italy because he offered a Nationalist, “Orderly” (Hence the symbol of the Fascii), and “modern” solution for Italy’s problems. The Spanish, German, Austrian, Portuguese, Polish, Hungarian and other Fascist movements offered the same thing. These right wing movements borrowed the term “Socialist” because the entire concept of Capitalism had proved thoroughly disagreeable, corrupt and degraded in its effects on Europe.

Communism, Capitalism and Fascism were each a mix of “pure” principles and corrupt ones. But they were popular because they offered claims of validation of those principles. Each group claimed they could generate a paradise, get the trains running on time, or get rid of a hated cause of misery and generate an idealized social order. They justified corrupt principles on the basis of idealized principles. They justified corrupt methodologies on the basis of “the ends justifies the means” – and they created a mess.

Principles are about resolving “Boundary Issues.”

The reality of principles is that they govern boundary setting. The practice of principles is about establishing “swimlanes” for human behavior (One has forward boundaries (time bounded) or goals, and lateral boundaries which represent our interactions with others, property boundaries, and social rules. Idealized boundaries say “we have liberty within our property” and “liberty within our swimlane.” Almost all forms of criminality and oppression involve boundary issues. Murder is obviously an assault on a person’s (forward) boundaries. Theft is an assault on one’s lateral boundaries — but so is oppression and kleptocracy.

Bad Principles create boundary issues.

To be free a person has to be able to negotiate boundaries with other people. Think of each car “owning” 60 feet in front of it, a few feet on each side, and 30 feet behind and you get the image. We need our “commons” because these are our highways. There is no freedom without roads. We need each other because no man is an Island. Include the “forward boundaries” (future, time, goals, ends) and it is impossible to be an Island. There is no future for a single man on an Island.

Bad Principles create ideological blinders

The reason that doctrines like Fascism, Rerum Novarum, Churches, Synagogues and Mosques, Communism, Libertarianism, Capitalism and other nonsense persist is that principles pertain to reality but require the vehicles of myth (allegory), abstraction, and narrative to exist. A vision of a Cathedral can result in a dungeon being built, but the vision itself is independent of reality. To build a vision that can never come true, requires efforts that never bear fruit. A person who doesn’t believe that there are restrictions in a certain direction will keep bumping up against invisible boundaries. A person who believes that something is there that isn’t, is in danger of running into things that he or she doesn’t believe exist. If the world were flat, Columbus would have fallen off of it. Many people don’t accept the reality of Gravity. They don’t fly, they die.

At the same time, faith in things that can’t be seen, but may well be either possible or real, is like the proverbial (Buddhist/Greek) story of Menander and the Buddhist Sage. Having faith in a true concept is like believing that the Ganges exists despite living in Europe. Trekking to the Ganges for such a person is rewarding because their faith enables them to find something that they would not have experienced otherwise. As my long ago poem said; “the same bricks and stones can be built to hold moldy bones, or to build a prison. The same bricks and stones can build a prison, or build a cathedral. The difference between profane things and sacred things — is how they are used.

We human beings are foolish to expect our religious narratives to be literally true. We are like people fighting over whether the Fox was real and whether the Grapes were really sour or the Fox just saying so. We miss the point of our great narratives when we expect them to come from Gods. We also dishonor our narratives when we don’t honor the truth.

The major media didn’t seem to want to cover the actual Martin Luther King commemoration, but some of them did cover Glen Beck’s show. And I wanted to hear what Glen Beck was going to do, so I watched about half of it this morning while eating breakfast, and then went outside to cut the grass. My conclusion? Well it could have been worse.

I didn’t catch him in any glaringly dishonest distortions this time (at least during the Saturday Rally), and I’m pleased that he had enough people connected to the real civil rights movement to make his rally a teaching moment for his followers. Some of Martin Luther Kings message almost got through the hype and substitution. I even kind of like his message on not focusing so much on the negative. I like the way he used “we” when he talked about doing that too often. As a preacher he has a future, just not in any church I’d attend.

On the other hand this show was way too much militaristic, way to jingoist, still demonizes his enemies (if by indirect aspersion rather than the usual direct demeaning), and still arrogated the Ineffable God as if the Personal Property of Christians through Jesus. I tried to stay long enough to find out of that rabbi he had on the stage was there for show or was going to be allowed to say something. Halfway through, If I’d been that Rabbi I’d have left.

This was a born again rally. I liked the admissions to humanity. We humans need grace. Based on strict causality we are in deep trouble. Maybe with some faith, courage, effort and charity we can earn some forgiveness and grace. As a Buddhist I’m a bit pessimistic, as a Mahayanist Lotus Sutra loving person I’m hopeful. As a Jew I wonder if Grace is Greek or Hebrew. As a student of religion (which makes me more like Hypatia in that I can’t believe anything credulously) I wonder whether this method of constructing an argument has logical integrity. Just because we want something to be so doesn’t mean it is so. To me being “born again” is not an end, but a beginning. When we start over we enter a long journey. He seems to think that being “born again” excuses bad behavior in the name of “Jesus.” On the contrary. It doesn’t.

Indeed the show reminded me of the “old” Born Again’s I knew back in the 70′s before they got a taste of power. It claimed to be “not about politics” — but these things are all about politics. Politics is the art of getting things done. He was just substituting religious politics for the usual Republican hype. And this was obviously a recruiting tool for trying to regenerate the Republican Party (or the Tea Party). I like his rediscovery of the citizen base of our Democratic movement, but I don’t like the way he directs that towards militarism. At least the fear wasn’t on display much. He had a man from the Dominican Republic, some Born Again Indians, and Conservative Blacks. Liberals need not apply and were shunted off to that other rally.

I admire his efforts to raise money for veterans, but the debt of gratitude we owe is to all of them and not only special forces, and that debt is something we all owe as a society and should express through Congress….

Well like I said, it could have been worse.

Still I agree with Eugene Robinson’s editorial:

“But the rest of us have every right to call the event what it is: an exercise in self-aggrandizement on a Napoleonic scale. I half-expect Beck to appear before the crowd in a bicorn hat, with one hand tucked into the front of his jacket.”

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/26/AR2010082605519.html

False Modesty is still false.