It Doesn’t Matter

It’s the mantra that our generation has come to proclaim. We have it well and why shouldn’t we. We were born in the greatest country in the world, into the wealthiest economy of nations, living on soil on which no war has been fought upon in over 150 years. Bred into an era awash with liquidity, credit and good fortune that has infused not only our own but that of the entire world. A planet free of international conflict, depression and social pandemic for over 3 decades.

So when we hear of such things, when our children read of depressions in their text books, we come to ask why. Why do we learn of such devastating events that has no affiliation whatsoever with our day and age? Why do we continue to teach industry instead of finance? “It doesn’t matter” we tell them.

However, history would beg to differ. We learn of the ancient cities of Rome and Tyre to remind us that those times were also ruled by men. Men who are invincible and who could not fail. Men who believe they are wiser than nature and the course of events. They told themselves “This time is different” while they scoffed at the failure of the empires. “Veni, vidi, vici” Caesar said. Today, people tell themselves the same.

Here are three examples, brought to us by Bill Bonner, of the sentimental shift that has occurred over the past few decades

Crashes Don’t Matter
First, there was the Crash of ’87. Stocks fell hard. But then, they got right back up again, as though nothing ever happened. Then, people began to think that crashes were no trouble. Even if stocks fell, they’d soon be on an upswing again. Books began to appear such as “Stocks for the Long Run.” People began to believe you couldn’t go wrong in stocks, no matter how much you paid for them.

Terrorists Don’t Matter
Second, in 1989, the Berlin Wall was dismantled. Suddenly, we no longer had any enemy worthy of the name. We weren’t going to be exterminated in a nuclear war after all. From here on, it would be clear sailing.

Deficits Don’t Matter
Third, Ronald Reagan and the neo-cons transformed the Republican Party. “Deficits don’t matter,” said Dick Cheney. They don’t matter to the Democrats. And now they no longer matter to Republicans either. After the ’80s there was no longer any organized political party in favor of fiscal and monetary conservativism.

Oh, the system won’t collapse tomorrow, or the next day. On the contrary it may seem to become stronger. It may rise to new heights, we may find additional ways to turn a dollar into many.

But let us not “discount nirvana” as Greenspan warned. (He may of been wrong too many times but it doesn’t make his statements any less true).

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