Wouldn’t it be nice to be able to identify all human failings clearly and concisely and then fix them? Or is that just my male, technocratic Virgo character speaking? Lord we’re complex creatures, huh? Yada yada yada, sure we are. There’s no fiction as interesting and crazy as the actual things people do, and we go grasping for why did they do that?
Politically we understand that people are, generally, uncomfortable with change. So we get hung up on the status quo as the default situation. No, actually the status quo when we were young is what we default to and all change after that is suspect. Most consider such change an incremental push in the wrong direction, while others who are more arch react to all progress (change) as if it’s sending us to hell in a hand basket.
The corollary factor to our fear of change is an even more disturbing willingness to disbelieve evidence. The greatest example of which is our human tendency to attribute most everything to the existence of supernatural beings with no tangible evidence whatsoever. Actually, in this case it’s not so much a matter of disbelieving the overwhelming evidence that there’s nothing out there listening to our prayers, as the desire to believe that there is and life will continue after death. So such “evidence” proving what we want to believe is easy to manufacture. It’s not so hard to see Jesus in a piece of toast if you have an idea in your head of what Jesus looks like and you want to see him. The Rangers won, ergo God exists and likes me!
This same disconnect with objective reality (it’s just burn marks on a piece of toast, people) happens all the time in politics, beyond the partisan desire to see the team you belong to succeed.
Once again, in reading history the same themes arise again and again. The responses of the financial elites to the Great Depression in the 30s, and the proposals to fix the system that caused it are indistinguishable from quotes 80 years later about the latest economic meltdown and what should be done – it really could be a parlor game, “Guess the Misguided Statement of Fear”. It’s bad enough that many of the same factors that caused the 1929 disaster were back again 80 years later because taking out the improvements of the 30s was the rage of the 90s and 00s. Ostensibly smart people somehow thought that human nature had changed over 8 decades and it was now okay to go back to the lax regulatory schemes of the 20s. Sure, Glass-Steagall and such worked for all this time, but there’s a lot of money to be made and there’s just no way that the geniuses at Goldman Sachs and Bank of America would take chances with the economy like they did in the 20s. We know so much more now about how it all works.
Yeah, and we then ignore it – because we want to.
When the Securities Act, Glass-Steagall and the Federal Deposit Insurance Corporation were proposed and enacted in 1933, Francis H. Sisson, President of the American Bankers Association said, “What American banking needs is the abolishment of special laws placing it under public regulation and supervision, rather than more statutes for its restriction and control.”
This was at a time when banks were going out of business, being suspended from taking deposits and suffering from a volatility that would be alarming for restaurants today! But many like Sisson warned not to change anything ’cause that would be communism. Hoover and his conservatives were sure that the only course of action was to let everything take its course and get back to more prudent management. The fact that 25% of the men were unemployed and people were starving to death was less important than keeping the shackles of regulation off the backs of American business.
“During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system, but also the capacity of the bankers in emergency.”
Herbert Hoover, Address before the annual convention of The American Bankers Association, Cleveland. October 2, 1930, almost one year after Black Friday. Perhaps the most delusional statement ever made by any American President.
The American Bankers Association fought “to the last ditch” against even the idea of the federal guarantee of deposits, calling it “unsound, unscientific, unjust and dangerous.” For the record, total bank suspensions for the rest of the decade were less than those in any year of the 20s and less than 8% of those in 1933. Such regulation made banking and our entire world economy minimally volatile. It made jobs in banking the rock solid aspiration they became from 1933 to 1999. But I’m sure Mr. Sisson was never convinced of its efficacy. Just like Phil Gramm, Bill Clinton and everyone who rooted for the Gramm-Leach-Bliley Act 66 years later were convinced it all had to go. Funny how when there’s billions on the table fear of change can just melt away.
It occurred to me, in light of Dick Cheney’s typical carping about President Obama’s foreign policy address at West Point, that the mechanisms that caused the Bush Administration to initiate the Iraq War, the expansion of NSA domestic spying and numerous other really bad ideas were similarly considered with blinkers on that caused the persons involved to see the evidence they wanted to see, not see that which they didn’t and sometimes hide evidence that was inconvenient because the ends justify the means – and well, we’re so smart that it’ll all work out.
The continued belief in some circles that America has to use its military liberally is never disabused by the realities of Iraq, Afghanistan, Vietnam, etc. because the people creating these doctrines are less concerned with the evidence of the efficacy of their ideas than keeping the mechanism of war greased and ready to go.
The financial community is always assured of its own genius, despite all evidence to the contrary.
In sports great athletes possess stores of confidence that are necessary to compete at high levels. The ability to always believe that you’ll make the next 3-point shot despite missing the last 10 is remarkable. But the downside of that is that very often great athletes can’t let go. They miss the 11th shot and still want to take the 12th when the fans and coaches know it’s time to pass the ball to someone younger, better. In sports, other than losing, there’s not much consequence to this arrogance. But in national policy the arrogance of ignoring evidence destroys lives and nations.