An Abundance Of Bad Decisions

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Fostering illusions of prosperity only further cripples our ability to make the necessary difficult decisions.

 
Have you ever noticed that the decisions made in times of abundance are generally bad? Bad might be too weak a word; catastrophically bad might be more accurate. This causal connection between abundance and flawed decision-making was one of the many stimulating ideas that came up during an afternoon with Aengus Anderson, host of the excellent audio program series The Conversation.
 
This dynamic has two sources:
 
1. There is no pressure in eras of abundance to make difficult choices. Since everything is going so swimmingly, "more of the same" is what everyone wants. After all, why risk upsetting the gravy train?
 
2. This pressure to maintain the Status Quo whittles down the options even being discussed to politically safe pseudo-reforms. Any ideas that are outside the more of the SAME box are dismissed or marginalized. (SAME: Socially acceptable middling effort--a telling acronym I found in the work of Michael O. Church.)
 
As a result of this paring away of all bold, daring ideas and solutions, the Status Quo toolbox is devoid of authentic solutions when the bad decisions finally catch up and the era of abundance devolves into scarcity.
 
This reliance on more of the SAME pseudo-reforms to address emerging crises leads to a policy of doing more of what has failed spectacularly and Going Through the Motions of reform to placate critics.
 
This dearth of concepts and policies that actually address the unfolding crises creates the phase-shift escalation of crisis and failed reform depicted in this chart:
 
 
Both the Power Elites and the general populace have been crippled by abundance:since no one has been forced to make difficult decisions for so long, the leadership and the public have both lost the ability and will to make demanding analyses and choices.
 
Since there are no tools left in the policy tool box and no ability to fashion new tools, the Status Quo figuratively tries to pound down nails with a screwdriver. Of course they fail, and fail spectacularly; they don't have the right tools. All they have is socially and politically acceptable pseudo-reforms and simulacra big ideas.
 
Examples of pseudo-reforms and simulacra big ideas include trillion-dollar boondoggles such as ObamaCare, the $1 trillion student loan "solution" to higher education costs and the F-35 fighter aircraft program.
 
All of these are simply increasingly costly more of the SAME.
 
This is not a political dynamic: it is a human-nature dynamic. When do we spend more than is prudent on big-ticket consumables? When we feel the glow of abundance (what the Federal Reserve calls the wealth effect). When do we join the herd gambling on housing or stocks? When everyone's winning and abundance is flowing everywhere. When do we over-promise future commitments? When there appears to be no end to ever-rising abundance.
 
This dynamic of over-promising future commitments and squandering money is a key reason the expansive central state is doomed to crisis and failure.
 
When do we buckle down and open our minds to solutions and alternatives that we didn't need to even consider in eras of abundance? When things get dicey and scarce. When do we start looking at expenses? Certainly not when money is easy to borrow.
 
There is one last sobering dynamic we need to ponder. For the past five years of suppressed crisis, central states around the world have chosen to create an artificial sense of abundance by printing or borrowing trillions of dollars of fiat money and flooding their economies with this false abundance.
 
This false abundance has led to a continuation of bad decision-making, as it has nurtured a magical-thinking faith that the era of abundance can be conjured up with monetary tricks. This is the essential feature of cargo cults, the magical-thinking belief in the return of abundance without having to chart a new path of authentic reforms.
 
Creating the monetary illusion of abundance is not the same as authentic abundance. Fostering illusions of prosperity only further cripples our ability to make the necessary difficult decisions.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
El Viejo's picture

Just not in the hands of those who might actually spend it.

Oldwood's picture

This assumes that delusion cannot persist. That has not been a reality thus far.

Doubleguns's picture

“Do not blame Caesar, blame the people of Rome who have so enthusiastically acclaimed and adored him and rejoiced in their loss of freedom and danced in his path and given him triumphal processions. Blame the people who hail him when he speaks in the Forum of the new wonderful good society which shall now be Rome’s, interpreted to mean more money, more ease, more security, and more living fatly at the expense of the industrious.” –Roman philosopher and statesman Marcus Tullius Cicero

Nue's picture

The most famous last words in history are  "I know what I'm doing." The second most famous are "Our research indicates....(fill in the blank)".

Bastiat's picture

Those may be the last words sealing the decision but the very last words are:  "Oh Shit!"

dunce's picture

Those are in fact the last words of most in flight recordings just before they crash. only the variation is "ah shit".

Groundhog Day's picture

If it took 40 years to get to stage 5 I guess we have to wait another 5 years for the collapse

q99x2's picture

Janet Napolitano and setting up the DHS to kill Americans was not an easy decision.

But ya when the time comes the elite will be the least prepared.

Yen Cross's picture

   "Shit happens"_  "I Fucked Up"_ "I'll Try Harder"_ "I can keep a secret"_  { Need I say MOAR?}

involuntarilybirthed's picture

Reasonable stuff.  Good work. 

 Washinton is incapable.  It is without experience, vision, direction and courage to lead us from this mire.  Priortiy goes to the party and/or who can garner the most attention and spotlight.  We are country losing its definition, not unlike much of the world community.

Yen Cross's picture

     Enough game playing!  I have been waiting 3 months for this trade. I don't mind sharing it, because the momentum works in my favor.

        [IMG]http://imageshack.us/a/img577/5418/gbpauddaily.png[/IMG]       Notice the shooting star on 6-11, followed by a wierd Doji looking thing, and finally the Bearish engulfing candle. This trade has moved 2200 pips from early April.

                                                                                                                                                        I WANT SOME!

RockyRacoon's picture

Do I get a toaster or something if I participate?   Where do I send my money?  I'm excited!

Wait... what's a Doji?

Yen Cross's picture

  Introduction to Candlesticks - ChartSchool - StockCharts.com

     Do not attempt to enter this trade Rocky. [Unless your a skilled F/X trader]  It moves 2-300 pips very quickly. (Margin management skills required)

RockyRacoon's picture

Just joshin', YC.  But... hey, how 'bout my toaster.

stacking12321's picture

stop asking so many questions!

gambling is supposed to be FUN!

 

Yen Cross's picture

  Screw you junker. You got caught on the wrong side of the trade. (show yourself pussy)

bnbdnb's picture

Yep, my EUR/JPY long finally stopped out after my 20th lot.

Stuck on Zero's picture

I will believe in central economic control and Keynesian economics when I see government save money during good times.

 

dunce's picture

Real wealth comes out of the ground as a result of mans labor be it wheat,corn, lumber, coal or oil. The application of more labor adds more value as wheat becomes flour and flour becomes bread, or lumber becomes houses or iron ore becomes steel and is made into machines. If this money was invested in oil drilling it would create original wealth or if it was invested in a mine development real wealth and jobs would result. When our settlers tilled the land in this country it rapidly went from the stone age to a rich nation.

Dixie Rect's picture

Relax, everyone has third mortgages on their nation nowadays.

cloudybrain's picture

that lifecycle lookslike happen in gold now, its stagnation  and collapsing