According to news reports, the world did not come to an end on Dec. 21 as some experts in Mayan culture had predicted, although other experts had downplayed the interpretation of the Mayan calendar completing its cycle.
Longstanding jokes have speculated on how the story might have been reported in various newspapers if the world really were ending. From The New York Times: “World Coming to an End: Stock Market to Close.” From USA Today: “World Ending: We’re Cooked.” From the Washington Post: “End of the World: Women and Minorities Affected Most.”
As a child, my parents took my brother and me to see an exhibit at the Franklin Institute’s Fels Planetarium in Philadelphia called “Ten Ways the World Could End.” For a child, it was a scary experience. The scenarios are now familiar — a meteorite striking earth, nuclear war, aggravation of ice age conditions, etc. Science seems to hold that eventually, if the world didn’t end some other way, the sun would burn out, but by then humanity would probably have found another place to see if man-made governments could solve the fiscal cliff.
Perhaps there are circumstances short of the end of the world that would be serious enough to consider the implications they may have for the nature and quality of life in America. One example would be the extinction of a useful species, such as the carrier pigeon. Another would be the suggestion 20 years ago by Francis Fukuyama in his book The End of History and the Last Man that democracy, as practiced in the West, had triumphed.
Fukuyama might acknowledge today that the condition he described was more like a timeout than the end of the game, and by 2006, he said this in an article in the NYT Magazine: “Leninism was a tragedy in its Bolshevik version, and it has returned as farce when practiced by the United States.” I had come to the same conclusion independently. The irony that we have evolved a government capable of devising a program like No Child Left Behind is certainly deserving of serious end-of-year reflection.
Another indication that part of the world may have ended can be found by perusing the list of nonfiction/general best sellers in the Washington Post. The first and tenth books on the list are cookbooks, which probably belong in another category, such as self help or reference.
The second book is Thomas Jefferson: The Art of Power by Jon Meacham — no quarrel with this one.
The fourth book is the Guinness Book of World Records 2013, another book for the reference shelf. Numbers three and five are what I would call “formula/celebrity” books. Say you’re Bill O’Reilly. Pick an assassinated president, put the word “Killing” before his name, hire Martin Dugard and create a vehicle for promotion. In fairness, a lot of the proceeds go to charity, but it’s still annoying, as is another celebrity best seller, this time by Stephen Colbert, standing at number six.
I saw one of the book presentations for No Easy Day by “Mark Owen” and this one probably belongs near the top of the list, not at number seven. Number nine on the list, Nate Silver’s book on predictions, deserves the benefit of the doubt.
Regarding Colin Powell’s It Worked for Me, written with Tony Koltz, this one is borderline at number eight. For balance, one might look up the commentary of the late Gen. Clarence Waller, a critic of the decision to end the first Gulf War in a manner that Waller found astonishing, because it left much of Saddam’s fighting machine intact.
The point is that with a couple of exceptions, this is a pretty weak list of best sellers. The book industry is as troubled as the banking industry, as a visit to the local Borders will confirm, but with little hope of a bailout from the Fed. The saving grace is that plenty of worthwhile books are still being published, although they won’t make the bestseller list.
Speaking of bailouts, Alexis de Tocqueville predicted in Democracy in America that once Americans realized that they could gain unlimited largess from their government by voting for it, democracy would evolve into a “tyranny of the majority,” or as George W. Bush would say, a “tie-ranny.”
Now we seem to have evolved further to a point where a junta composed of bankers and their lawyers can gain control over the Treasury and the Federal Reserve and offload underwater assets at par, while at the same time taking credit for rescuing the economy and the American way of life.
Within the financial policy realm that is the subject of this blog, one can wonder whether the globe has stopped spinning, as both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission practically suspended their efforts to implement the remaining regulations mandated by the Dodd-Frank Act two years ago. While participating in a congressional study of the future of financial regulation in 1976, I predicted that financial reform would be a 35-year project.
In retrospect, it looks like financial reform had expired as a movement by 1981, and hardly any of the so-called “landmark” acts that followed the 1976 study have ever been implemented. If anything, reform has slipped into reverse, as lessons that were supposedly learned during various episodes of the crisis have been recast as justifications for intervention on behalf of too big to fail banks and other failing or flailing financial institutions. In Leninist terms, this constitutes the management by federal commissars of the “Commanding Heights” of the economy through ad hoc government intervention.
It is entirely possible that Congress will be so immersed in fiscal issues and in preparing for the mid-term elections that the financial reform agenda will slip another two years. However, there are bound to be intriguing stories to discuss as the administration fills such key posts as Treasury Secretary, SEC Chairman and perhaps Fed Chairman. There will also be the continuing drama of the efforts of the global authorities to manage the ongoing crisis in Europe, while the U.S. Treasury and Fed try to hide an estimated $15 trillion in embedded losses and wind down the policy that has come to be known as QEforever. One wag described this adventure as “like trying to land a jet plane in a residential driveway.”
The economy could be headed for a bout of “snagflation” reminiscent of the last time the authorities discarded all notions of fiscal and monetary restraint as the Vietnam War was slowly winding down but dragging on, while domestic programs continued to grow and proliferate. Financial pundits are chipper in their confidence that the financial world isn’t coming to an end.
They’re secure in the Bernanke put, the knowledge that if anything goes wrong, Fed Chairman Ben Bernanke will get into his helicopter, like Jack Bauer in the TV show 24, and make it rain money, as he has already done several times. However, some probability has to be assigned to the chance that the U.S. economy will slip into an inflationary recession after all of this liquidity takes effect and interest rates finally have to be raised.
Best holiday wishes to all Newsmax readers.
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