Our Own Worst Enemy and the 2008 Fiscal Crisis

The Great Financial Crisis of 2008 must be seen in the largest possible context. Considered in the light of the war between radical Islamic fundamentalists and the West, it’s clear that those who wish the West harm couldn’t be happier. We’ve helped them by administering some deep, self-inflicted wounds arising from the many psycholog-

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ical weaknesses built into American culture.

As we know, one goal of the 9/11 attackers was to weaken and destroy America’s financial strength and dominance. The World Trade Center was specifically targeted not only as a symbol of US financial might but also because it served as workplace for thousands of global financial experts whose years of expertise, should they be eliminated at one blow, could not easily be replaced.

Reactive societies such as our own move slowly and only after they’ve been severely hurt. It’s hard catching the horse after it’s out of the barn, while our after-the-fact responses becoming enormously difficult or completely ineffectual in any case. This repeated behavior is clearly irrational since we already know we do things this way and continue to ignore the many warnings we’ve given ourselves beforehand.

Part of the reason we’ve reached this pass, as many social critics, sociologists and contemporary historians have observed, is that we’ve become an overindulgent society that embraces myriad self-defeating fantasies. They include the fantasies that: there are no limits; there are no consequences; mistakes won’t hurt us; and there’s always another chance.

Only part of this behavior is rooted in childhood. The rest results from a series of complex cultural interactions which include the influence of the institutions we’ve created to embody, reflect, and control our wishes, fears, and impulses that also confirm and justify our beliefs and behaviors, as well as the contemporary re-staging of particular past traumas we’ve brought upon ourselves.

Sixty percent of teenage youth in our inner cities try to gain a measure of self-importance by thinking they’ll make it into the National Basketball Association (NBA), while polls show that the main goal of sixty percent of American high school students is to become a “celebrity.”

In addition, many veterans are troubled by what they find when they return to the States. Intellectually, of course, we “know” we’re at war;

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emotionally and behaviorally we’re maintaining the collective pretense that the wars in Iraq and Afghanistan don’t really exist since we’ve never been asked to sacrifice anything for them, and, without a draft, are being waged on the emotional cheap, while the chosen war in Iraq, and its predictable and predicted disastrous occupation, have been financed—up till now—by China’s purchase of billions and billions of U.S. Treasury bonds.

The arrogant and delusional ethnocentric notion that we can solve every problem (“After all, we’re Americans”), when added to our low frustration tolerance (when did the Deferred Gratification Pattern disappear?), and our narcissism (the chant of “me, me, me” since the 1970s), means we end up acting out self-sabotaging impulses, like putting ourselves in personal debts we can’t repay.

In doing so we were only following the model of permissive leadership of a spendthrift conservative Republican administration. (What ever happened to their party’s principle of fiscal responsibility?) Their long-term small-government agenda was openly meant to spend us into such debt that to eventually balance budgets we’d have to end programs and agencies, thus dismantling the Democrats’ New Deal and Great Society entitlements they so despised.

Past societies have destroyed themselves when heavy long-term stressors produced irrationalities they couldn’t control. That likelihood is enhanced every time we employ the standard run of immature intra-psychic defenses—projection, displacement, denial, rationalization, and the rest— to help us escape the uncomfortable emotions aroused by realistic appraisals of what’s happening, or what’s likely to happen. Media fear mongering (we’ll tune into news of the latest hurricane threat, but not to the Iraq war) undermines our ability to handle anxieties produced by those fears. Also, it’s not that the Iraq war should be put on the back burner during the current crisis (as some of our leaders have suggested) since the costs of the war are part of the crisis, while our fears of global warming and energy dependence come back to terrify us as a consequence of what we’ve created in the first place (those SUVs and Hummers symbolically representing our insatiable need to endlessly feed the bottomless emotional hunger of our infantile selves while “proving” we’ve moved several rungs up the status ladder).

The whole society’s persistent mantra that material things will make us happy means that when we’re frightened or depressed, the first thing we do is to go to the place we’ve been conditioned to go to since childhood—to endlessly spend, spend, spend, and buy, buy, buy, regardless of the consequences. We’re addicted to a great number of these non-adaptive escapes—food, sports, entertainment, drugs, automobiles, The Ostrich Effect, sex, credit card debt, owning homes whose mortgages we can’t repay. We’ve found plenty of people, including some sociopathic captains of predatory capitalism, only too willing to indulge us. The headlong stampede into the quick fix of a $700 billion-plus bailout with neither reasoned judgment nor built-in protection has already resulted in millions of tax dollars being tucked away by those predatory CEOs as part of their personal golden parachutes until such time as they’re ready (or forced) to step down.

Even if we’re only speaking metaphorically, it seems as if markets follow manic-depressive cycles. Although nearly all the investment manuals tell us that markets are driven by fear and greed, we always seem to dogmatically (and defensively) embrace the illusion of markets as self-regulating rational systems, especially during bubbles. Our greed allows us to become the victims of periodic highway robberies—the S & L scandal of the late 1980s, the MCI and Enron scams of the late 1990s, the current financial crisis—and are also seen as opportunities by those who practice disaster capitalism, things like Katrina, and the Gulf War, in order to transform disasters into windfalls. The Bush administration’s deregulations, along with our allowing agencies to fail to enforce the regulations already on the books, are also part of the picture.

One step in finding ways to stop sleepwalking through history is to recognize how we try to escape our emotions so we can better tolerate ambivalence, fear, and ambiguity, and stop aiding those who wish us harm by bringing upon ourselves the very things we’re most trying to avoid.

Given the evidence from both the historical and clinical records, it doesn’t seem likely that will happen any time soon. It would require someone with the maturity, political courage, and personal

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strength to begin telling us what we actually need to hear. One would like to think it’s possible, despite the messianic expectations, charisma, and magical solutions we’ve collectively invested in our new President-elect, that as president Obama will be able to lead us into more rational choices despite our unwillingness to even see, let alone discuss them.

Now is certainly a time for hope, but only time will tell if we can resolve our financial crises with sufficient speed to allow us to fully return our focus to where it belongs, to the many real dangers which face us. Meanwhile, as the world financial crisis we’ve brought upon ourselves continues to unfold, those who wish us harm remain on our borders and in our minds.

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