Years of misbehavior, favoritism and outright criminal acts produced a view of government officials that ranks below that of used-car salesmen. No other group or institution is held in lower esteem.
As markets continue to confound, it is useful to reflect on this quote from Jim Sinclair, particularly the last sentence:
The world has taken on a “virtual reality” with no reference to what really is. This is the biggest market power play of smoke and mirrors in history. It is happening because the financial system is in a terminal state of broken.
I could not agree more. This same view has been expressed since the inception of this website (over three and a half years ago). Mr. Sinclair’s wonderfully clever and colorful phrase,”terminal state of broken,” captures matters well. He used it with respect to financial markets, but it applies to much more.
The terminal state of broken also applies to government and the institutions contained therein. Furthermore, these areas have infected non-governmental institutions, especially those which derive their existence and/or success from a close association with government. These include the educational system, defense industry, highly regulated industries like medicine and finance and a host of others.
The common denominator in all of this is government. It is the modern day equivalent of typhoid Mary, infecting all that it comes in contact with duplicity, dishonesty and corruption. This “brokeness” now infects the very morality and civility of society. Institutional behavior provides the moral guidelines (or lack thereof) for society. Corruption, deceit and theft are not virtues, yet if they are practiced openly they cease to become vices.
Immorality in higher institutions weakens the social and moral fabric of a society. Incivility and coarseness is the least of the problems. Justice Brandeis commented on the “trickle down” effect of institutional behavior, focusing on that of government itself:
In a government of laws, the existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipotent teacher. For good or ill, it teaches the whole people by its example. If government becomes a lawbreaker it breeds contempt for law: it invites every man to become a law unto himself. It invites anarchy.
Brandeis’ warning was early enough to head off our current condition, but it went unheeded. Instead, our “omnipotent teacher” chose to ignore ethics and morality as they stood in the way of the desire for power and wealth.
Government increasingly took on the Nockian (Albert J. Nock) description:
Taking the State wherever found, striking into its history at any point, one sees no way to differentiate the activities of its founders, administrators and beneficiaries from those of a professional-criminal class.
Years of misbehavior, favoritism and outright criminal acts produced a view of government officials that ranks below that of used-car salesmen. No other group or institution is held in lower esteem. Government’s survival is no longer based on a functional, moral need. Its continued survival depends upon its ability to distribute largess.
The wealthy and the poor now consider themselves allies with government. The wealthy are provided favors and leeway that free markets would not allow. The poor are bribed with “goodies” that government takes from the productive in exchange for votes.
“Terminally broken” is the exact description for our current situation. Terminally, I interpret, as hopelessly, as in unfixable. Terminally also implies a temporary condition, one that cannot last very long. The unstable equilibrium that now exists is not too different from the eye of a hurricane. Any movement out of this rather small protective area will produce havoc.
“Monty Pelerin” is a pseudonym derived from The Mont Pelerin Society. The writer has no connection with the Society (other than coincidence of philosophy). Nothing said by me should be considered to be representative of the views of the Mont Pelerin Society or any of its members. “Monty Pelerin” blogs at Monty Pelerin’s World
Also please consider:
Zombified Cities Roundup: Detroit Becomes Dumping Ground for the Dead; Financial Urgency in Miami; Oakland Pension Time Bomb; How Pensions Crashed Stockton and San Bernardino
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