The Bailout And The Economics Of Apocalypse

As a rule of thumb, when times turn bad imagination turns psychotic and people run for cover that is no longer there. Apocalyptic thinking overwhelms careful analysis of options remaining, decisions beckoning, and outcomes possible. Futuring collapses into catastrophizing, and the wisdom of the many is denigrated by the posturing of the few, who demand unquestioning acceptance of their prophecies of what is to come for everyone except an especially privileged cadre of those willing to get themselves in touch and tune with the elemental Force(s) of the universe.

One of the most interesting things that happened in the recent messing around with ostensibly collapsing financial markets in this country and abroad was how quickly financiers and economists morphed into theologians. "Disaster, "meltdown" and even "global catastrophe" became the scare words. All of a sudden, it would seem, God had decided to shift the playing field of Armageddon from the Plain of Jezreel to the island of Manhattan, with Wall Street the newly designated romping ground for the Beast from the Abyss. The mountains about to fall on everyone, the prophetic messengers are still crying, are mountains of debt, and their crumbling will bury everyone, the profligate and the frugal, the law-flouting and the law-obeying, the goods-consuming and the goods-producing alike.

As all really impressive apocalypticists do, these guys (we did not hear much from competent female economists, and Nancy Pelosi doesn't count) moved swiftly and seductively to their flash finishes, their pretentious pronouncements of a way --- the only way --- to stave off the End, this time, of global prosperity as the formerly prosperous (that is, they and most everyone else but us) have known it. But then, the apocalyptic thinking took a turn that not even John of Patmos could have envisioned. It is not toward the time-honored way of repentance, of greed, for an obvious example; this, it would appear, is a way for only the economically simple-minded. The far more complicated way, especially of Messrs. Paulson and Bernanke, seems to be a way of repenting of repenting itself. If I understand the implications of their proposals --- and whether anyone does at this moment is unclear --- a lot of money will be made available to those whose previous investment mistakes are what fired up the Dragon in the first place, so that many of these same institutions will be able to go out and make these same mistakes again.

What mistakes? From the standpoint of MBA courses at least, the really sleazy ones appear to be so subtle and complex that it will take experts a long time to figure out how anyone managed to make them at all, not to mention making them work. Even so, it should not be beyond these experts to get their work done in time to put a stop to all the economic slicing and dicing for good. Overarching the wheeling and dealing, though, is the really fundamental issue, and it is not an issue of economics.

At the risk of oversimplification at a time when apocalypticists are calling for still more obfuscation, I wonder if the issue might not be put this way: John and/or Jane Doe want to borrow money to buy a place or maybe even a business of their own. By any reasonable standard of assessing ability to pay, neither or both can marshall the resources to pay the money back. No problem. Potential lenders size up whether either or both have the moxie to appear to be willing and able to pay it back, and on the basis of appearance rather than reality set John and/or Jane up with a mortgage, take commissions off the top, and skip town (otherwise known as pursuing other opportunities). To jump into the theological about this for just a moment, what adds flavor to the scenario is the image of a Miltonic Satan, whispering in the ears of John and/or Jane, "You can afford it; you deserve it," and in the ears of their benefactors, "You can get away with it."

For the Johns and Janes who need no prompting to make and get stuck with financial commitments they have no right to make, and for the devilish financial advisors who make an unjustifiable profit assuring their Does how right they are in their narcissism, a dose of economic hellfire and brimstone just might be the thing to bring them to their senses. Although Dante may have made us recoil at the idea of it, Purgation is not always a bad thing. But the Doe clan is a very large clan in our society today, and it includes truly innocent victims of a truly devilish system which deforms a sound theology of money (gain, save, give) into a Deceiver-inspired one (gain, spend, steal). Putting the minions of the Deceiver in charge of making the system work that they have already shown to be deserving of collapse may be a credible way of ensuring peoples' deposits, but it is hardly the way to ensure their economic future against unjust suffering.