Saturday, June 05, 2010

Our Own Mythologies

Collateralized debt obligations, CDOs, were piles of triple-B mortgage bonds that were going to turn to gold. What wont Wall Street believe?
So asks the indispensable Arts & Letters Daily. It is their blurb for a glowing review of the new book by Michael Lewis, a career financial reporter who himself believed the hokum, right up until the world's economy tanked. His new book, The Big Short, is the story of the small number of financiers who did not believe, and who bet heavily against CDOs. In other words, the smart guys.

Good subject, to be sure. But it is the blurb that really engages us. "What won't Wall Street believe?" It is tempting to think of the modern markets as the exclusive preserve of mathematical wizards, pulled from promising academic careers and able to manipulate numbers in ways that normal people can't. Indeed, one frequently hears some variation upon this story as a rationale for the stratospheric bonuses to which investment bankers have become accustomed: they are so damn smart that they are irreplaceable, not only to their firms but to the global economy."

(Strangely, we heard this very idea proposed by an international businessman just recently. He earns his living by recruiting engineers, and complained that for many years "the smartest guys" had been lured away from engineering by finance. We stared at him for a few seconds, as slack-jawed as Cletus, and quietly asked how smart a fisherman can be, when he drops a bomb into the place where the fish breed.)

In fact, as the CDO bust demonstrates, the supposed whiz kids were as dumb as anybody else. They created a myth, and then believed it: that the smartest people on earth had created tools so powerful and complex that normal people, like the government, had neither the ability nor the right to examine them. They still believe the first part of that myth, since they think they deserve those bonuses, even after destroying their own world and much of ours as well.

All of which leaves us at the Egg wondering what other readily-falsifiable stories are floating around, and deserve to be regarded as myths both in the elevated sense of "stories by which we organize our lives," and the vulgar one of "damn lies."

A&L Daily offers a ready instance, providentially just above the CDO story. It links to a piece about Ayn Rand, the novelist and conservative icon who famously claimed that "I do not fake reality and never will." In fact, as two new biographies show, she was an amphetamine-addled fantasist who lied, in small ways and large, almost constantly.

A fiction-writer with some reliability issues is unremarkable by itself. Gore Vidal once said, "You can always identify the future novelist in any grade-school classroom. He's the pathological liar." Rand, however, is more than just a novelist. She has been the inspiration for generations of conservative intellectuals, including Ronald Reagan, Clarence Thomas, and Alan Greenspan.

Now, it does not necessarily follow that modern American conservatism is built upon an elaborate fabric of fantasies passed off as objective -- or "Objectivist" -- truth. To even argue such a case, one would need similar evidence against Milton Friedman and Freidrich Hayek, for starters. But we cannot help thinking of Greenspan's 2008 testimony before Congress, in which he admitted outright that his belief in industry self-regulation, a staple of conservative ideology, was just ... completely ... wrong.

What other pseudo-scientific ideological claims have been exploded in recent memory? Consider the "experts" who advised many Roman Catholic bishops that priests who abused children could be cured by time at a retreat center, and then sent back into the parish. Or the Murray/Herrnstein "Bell Curve". Or, in an entirely different category, the supposed "evidence" for Iraqi weapons of mass destruction, as well as the rest of the neocon/theocon case for that war.

To be sure, liberals have their own beloved "facts" which are difficult to actually prove. Anybody remember the "gay gene"? Alger Hiss's "innocence"? And that's not even mentioning outright whoppers, like the Gulf of Tonkin "incident". On the whole, however, it does seem to us that Democrats do a slightly better job than Republicans of relying upon evidence rather than theories as tools for government.

All of which reminds us of two things. First, that skepticism, joined to a zeal for the facts, is almost always rewarded. In that sense, the "hermeneutic of suspicion" beloved of feminist Biblical studies is simply a logical reaction to a world awash in ideology separated from fact. Second, we are reminded of Luther's straightforward definition of a god: "the thing upon which you set your heart and in which you place your trust." But he then adds that some gods are false and others -- well, Another -- are genuine. The truth of what we believe, as Luther says, is the difference between faith and idolatry.

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