I read an article recently speculating that the American people were in the grip of some sort of mass insanity - actual lunacy. You have to wonder.
What lies behind madness like the Dot.Com bubble or the subprime mortgage fiasco or the Iraq war?
Now greed has played a significant role in America's succession of bubbles but even the greedy don't have to be stupid. Imagine a startup company with a dozen employees that had never turned a dime in profit selling for millions upon millions of dollars. Imagine investing your life savings in that sort of "new economy" industry. You would have to be stupid.
The Enron/WorldCom fiasco was somewhat different. That was fraud effected through dodgy accounting.
The Housing Bubble, however, that in turn spawned the subprime mortgage disaster and the derivative meltdown was perhaps the most powerful example of greed blended with stupidity - at all levels of American society.
Homeowners actually believed the value of their properties would soar indefinitely, transforming the family home into a real life goose that laid the golden egg. Want a holiday? Refinance. New trucks and a fancy car? Refinance. Money was all but free anyway and, in the US, mortgage interest is tax deductible.
Free money, free money, free money. Who thinks that way? A lot of people, apparently. Now, of course, greed played a big role in it but there had to be a huge amount of stupidity fueling it too.
The banks rolled the same dice only they played in derivatives - asset backed commercial paper - bundled chunks of a mess of mortgages. So mixed up, in fact, that they weren't sure just who owned what. When that paper began to turn bad they couldn't even tell who was in how much trouble. Stupid, stupid and stupid.
And then there was the government, the people paid to govern the country, to keep its people safe and protect their prosperity. What did they do? Nothing. They were afraid to upset the apple cart. They were riding high on a country whose people had the appearance of comfort and prosperity from an economy dominated by people selling their homes to each other.
You know, when you're the ground crew of a hot air balloon and the balloon gets swept away in a gust you don't want to be the last guy holding on to the ropes and, if you are, you want to make sure you too let go before it takes you too far off the ground. In America, everyone was hanging onto the rope, leaving the ground (reality) further and further behind. Go on the internet and you can find videos of what eventually happens to people that stupid.
But it's not just in the stock market and housing market that Americans have been running flat out on stupid. Cheap foreign money has allowed Americans to literally wallow in debt. From the federal government down to the lowly taxpayer they've been steadily stumbling deeper and deeper into debt.
Imagine running deficits and then deciding you can wage an enormously expensive foreign war on borrowed money and create massive tax cuts for the rich. The clue is war on borrowed money. If you have to borrow money to kill people on the other side of the planet that means you'll also have to borrow money to cover the revenues lost by those tax cuts. How astonishingly stupid is that?
Then, as the US Comptroller General pointed out in a speech last year, there's the federal government's unfunded liabilities, IOUs if you like, that add $440,000 in debt to the average American household. By now that could be half a million. How do they get away with it? Simple, they haven't sent the bills out yet. Out of sight, out of mind.
Would you get into a car with a driver who was so drunk he couldn't stand up? If you would, find something else to read. If you wouldn't, though, apply all of this stupidity to the issue of continental integration - the deal that Harper is pursuing very quietly with the Americans.
Would you want to buy your way into a junior partnership where the majority partner is on the verge of bankruptcy or beset by an uncontrollable gambling addiction or is just plain stupid? No, there are better deals to be had and now's a good time to start casting about.
We've become much too economically dependent on the United States and that's a real vulnerability. We need to look elsewhere, to revitalize our trading relationships with Europe, Asia and South America. We can't save our American cousins from themselves but we can sure get dragged down with them if we're not diligent about protecting our own interests.
Now, if you ever needed a reason not to vote for Steve Harper, there it is. You see, he's hoping to get us running on stupid too.
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