More Money than Brains: Why Schools Suck, College is Crap, & Idiots Think They’re Right

by Penny, Laura

  In an August 2007 speech, Romney maintained that he loves France, even speaks French himself. Heck, his kids were on vacation in France right then! France was just one of a list of bogeymen that Romney was planning to deploy in the campaign. He was also girding his loins for battle against Hollywood, Hillary, and Massachusetts, the depraved socialist hellhole he governed from 2003 to 2007.

  The Romney documents show that his team was concerned that the public thought he was a flip-flopper. Flip-flopping is a grievous charge. The valorization of certitude, the idea that staunch belief is a political virtue, means that anyone who changes his mind appears weak or vacillating.

  It’s absurd to call a politician a flip-flopper when he changes his mind because the situation changes or because he learns something new. That’s not flip-flopping; it’s sentience. But Romney is flip-flopping like a fish on a floor, trying to pick the most politically expedient positions, conjuring convenient devils to raise hackles and funds. What can anyone reasonably expect politicians to do about Hollywood? Is bringing back the Hays Production Code an urgent action item? Of course not. Romney’s words are only means to ends, ways to win.

  The creepy spectre of Euro-socialism has so inflamed the right that they now require classic Continental baddies such as Mussolini’s Italy, Hitler’s Germany, and Stalin’s Russia to represent the bleak American future. But right-wingers continue to make disparaging remarks about the French. The health-care debate provided irresistible opportunities to dispute the claim that the French health-care system is the best in the world. How could it be? It’s a government-run program, and they always fail.

  Anti-French invective is another form of nerd-bashing, but it sure is funny hearing it from someone who is wearing a Ben Franklin costume. The right’s heroes, the guys they name-check in their books and speeches, the guys they dress up as at rallies, all admired the French. They relied on the French. French ideas inspired the men who wrote America’s founding documents, and French funds helped pay for their muskets and gunpowder. Without the help of the French, and the fancy French thought that real Americans sneer at, there wouldn’t be an America at all. Sacre vache, y’all would be speaking British!

  This part of America’s history – the fact that the founders were nerds, not bullies – is conveniently omitted from the idiocratic version of the American Revolution, which is the story of a bunch of Joe Six-Packs getting mad as hell and deciding they weren’t gonna take it anymore. They stood up! They fought! You do not often hear the right enthuse about the long hours the Founding Fathers spent thinking, reading philosophical texts, and crafting the documents that teabaggers wave at protests and pretend to defend. I guess “They sat down! They wrote!” just doesn’t have the same zing.

  The tea-partiers are a minority, and an extreme one at that, but their beliefs are paranoid, cartoon versions of opinions that the moderate majority hold too. You can’t trust the government or big business, in that order. The only thing you can trust is the people. Freedom is the highest value: it decrees that I get to do what I like, spend my money how I please, and rear my progeny however I see fit.

  These beliefs are totally mainstream. We see them in TV shows and movies. We hear them in pop music; rappers and redneck country singers agree that every North American is free to get rich. We see these beliefs in ads all the time. Corporations play on public distrust, selling themselves as the only company that really cares about you, the lone honest broker or quality product in a world of lies and junk. Advertisers also love freedom-speak. Each innovation, no matter how minor, represents a liberation. McCafé ends the elitist stranglehold on espresso. Lysol leaves us germ-free. Vanilla toothpaste delivers us from the tyranny of mint.

  As I argued in Chapter Five, freedom’s most vocal defenders often end up trivializing it, defining it in merely selfish ways, such as the right to pick your favourite flavour or to teach your kid that global warming is a hoax. The right to be cheap, to hang on to one’s hard-earned dough, is paramount. “Why should I have to pay for that?” is the standard idiocratic objection to public spending on the arts and social services.

  I’m perfectly happy to pay taxes so kids and poets can eat, and I have no interest whatsoever in purchasing bombs or building hockey arenas. But Canada includes people who love hockey and people who love poetry and people who love both, people who want a bigger military and people who want to cut defence spending. So I am not always going to get what I want, and that’s the price of being part of a we. That’s a price that people seem increasingly unwilling to pay.

  The idiocratic version of freedom undermines the public infrastructure that sustains freedom. The idiocratic bias against government is not a healthy skepticism; rather, it is destructive and nihilistic. Teabaggers and radical libertarians who dream of a world without taxes, without government, without public schools or hospitals are the logical conclusion of idiocracy’s attempt to privatize all things public.

  The desire to privatize is based on the myth of “the people.” Politicians on both sides of the aisle are forever saying that “the people” are good; it is Ottawa and Washington that are bad. But the people choose their representative blackguards and dispatch them to their respective capital hells. The people vote for bad governments and patronize corrupt corporations. Separating the people and their institutions is a lot like trying to pry apart content and form, what we say and how we say it. This is what pseudo-populism tries to do when it insists that the people are always trustworthy but the governments they elect are not.

  Such assertions, like Palin’s passive verbs, dissolve responsibility. Saying that the people are better than their government encourages the people to ignore or disdain the government. This gives politicians permission to suck at their jobs and then blame the profession – politics in general – for their failures.

  Pseudo-populist politicians tell voters that they are smart, but they treat them like they are stupid. Hard-working people know best! Here’s a tax credit. Go get yourself something nice and don’t worry your pretty little head about the deficit. They use all kinds of emotive buzzwords, ploys, and props such as France and Hollywood, green forests and blue sweaters, to play the public. They hire consultants to study the public, focus-grouping and testing every message, so they can tell the people precisely what they want to hear. In short words. Over and over again. The subjects of these studies must really crank the dials on their approval meters whenever politicians praise the superior intelligence of “the people.”

  Telling people what they want to hear is much easier than telling them what they need to know or what the government plans to do. And listening to happy bullshit is easier than following the news and puzzling through the issues. The leaders don’t have to go through the fuss and bother of explaining their complicated plans, and we don’t have to feign interest in the tedious details. It’s efficient and convenient. It cuts down on the “verbage.” Everybody wins!

  But lately lots of people seem to be losing. They’re losing their jobs, losing their houses, losing their health insurance coverage, losing their pensions, losing their investments. They feel they are losing interest in the machinations of their minority government or losing their post-electoral hope. Some believe they are losing their country, and some of those people seem to be losing their minds. So who is really winning? The answer is glaringly obvious: the people with the highest scores.

  Pseudo-populism creates what it claims to despise. Politicians cede control to financial markets, which are elitist, and proudly so. They are complicated intellectual constructs that average, non-fiscal folks have a very hard time deciphering, that use math and language beyond our ken. Advice and counsel about the market is a huge market. Countless websites, books, seminars, and advisors offer explanations of how the market really works and how you can make it work for you.

  On Wall Street, experts run things at a remove from the commoners. Arcane specialized intelligence triumphs over common sense and hard work, and diabolical geniuses us
e their wicked gifts to flummox the average Joe. In market parlance, “smart money” refers to the big traders, firms like Goldman Sachs, which employ hired brains, complex computer programs, and sophisticated formulas. “Dumb money” is your average investor, small-timers sinking their savings into some stocks, the kind of guys and gals whom politicians talk about when they talk about the economy. Dumb money usually loses. Smart money usually wins.

  Let’s look at those anti-nerd allegations I listed in the first chapter, and see how many of them accurately describe the moneyed brains who brought you the market meltdown.

  1. The money-minded think they are better than you.

  In February 2008, CNBC reporter Rick Santelli, broadcasting from the floor of the Chicago Mercantile Exchange, went on a rant about government plans to assist people who could not pay their mortgages. He was outraged that the government was promoting bad behaviour. He suggested that it allow people to vote online, holding a referendum to see if folks really wanted to pay “the losers’ mortgages.” Santelli argued that the government should give money to those who know what to do with it, rewarding the “people that can carry the water, instead of drink the water.”7

  The traders cheered and applauded. They are the winners, the water-carriers, the ones who create value. The rest of us simply cannot be trusted with nice things like money or houses. This blame-the-victim explanation for the fiscal crisis was quite popular. It was the least knowledgeable participants who had crashed the system. The suckers and losers, the foreclosed folks at the bottom of the housing pyramid, were the bad guys. The experts who created and sold those mortgages, and then chopped them up and bundled them into complex investment instruments that supposedly made risks magically disappear, were not responsible.

  But the losers who got mortgages they could not pay, who gambled on their houses and lost, were enthusiastically encouraged to do so by ostensible experts: mortgage brokers, the stock market, the government. Throughout the housing bubble, governments and markets told everyone that they were entitled to own a house or exploit the value of their home. The losers just drank the water that the traders, and their friends in the government, carried.

  Who were the bigger losers? The family who lost their home or the swaggering geniuses who lost other people’s billions, who raised and razed the value of North America’s pension funds and stock portfolios?

  The people who caused the crisis argued that they were the only ones expert enough to fix it. It was crucial to keep providing large salaries and bonuses, else the talent take their expertise elsewhere. Winners and water-carriers are entitled to lavish compensation because they are winners and water-carriers, regardless of how many losses they generate or how many wells they poison. Which brings us to …

  2. The money-minded expect money for nothing.

  Matt Taibbi, a political reporter for Rolling Stone, has written a series of articles about the frauds that riddle Wall Street, describing the market as a “mountain of paste.” He goes on to say: “Innovations like the ones that triggered the global collapse – credit-default swaps and collateralized debt obligations – were employed for the primary purpose of synthesizing out of thin air those revenue flows that our dying industrial economy was no longer pumping into the financial bloodstream.”8 Making and marketing decent products is sooo last century. Now money makes money from money. The money-minded made oodles of money placing bets on bets, selling and reselling money that was not really there or theirs, trading loans that consumers could not pay and banks could not cover.

  We treat the stock market like a reliable indicator, something that shows us how the economy is really doing. But the economy of the finance sector has become increasingly estranged from the economy that most of us live in. Unemployment and foreclosure rates are still high and consumer confidence is still low, but so long as the Dow is above 10,000, all is right with the world. Hooray, bank profits are back up again too! Their big revenue generator? Overdraft fees.

  The creation of wealth and the creation of value are two different things. Traders can generate vast paper fortunes that do not contribute anything to the economy, that do not get ploughed into the creation of new businesses or jobs. Bets on bets based on purely notional assets may make the smart money a quick buck, but they do not create work or good products or value. Instead, they simply Hoover up the dumb money and funnel it to the smart so they can gamble among themselves and generate more chimerical wealth by placing meta-bets on bets on IOUS.

  3. The money-minded are social engineers who want to run the world.

  The money-minded are much more powerful than the average nerd. It’s hard to imagine any group of nerds causing such widespread panic and urgent government action and costing citizens so much. For example, the scientific community has been warning us for years that Earth’s ice is melting. We hem and haw about that problem, and so do our governments. But when it was money that started melting, it was a serious crisis, prompting immediate, drastic measures. The imaginary money, the fortunes wrought of paste, are important enough to require public protection and care. The planet? Not so much.

  The great deregulation that commenced in the 1980s has given money three freedoms that make it extraordinarily powerful. Free marketeers are free from oversight and rules concocted by petty bureaucrats. But they are also free to intervene in public policy and free to draw on the public purse. The money-minded have been insulting government for nearly thirty years, but every time the moneyed lose vast sums, they traipse to the capital for emergency capital. More often than not, their bailout wishes are granted. And those infusions of taxpayer dollars – yet another example of dumb money slurped up by the smart – free the market to start creating its next crisis.

  4. The money-minded live in a candy-coloured dream world.

  Remember the Internet boom and its prognostications, such as Dow 36,000? When the Internet bubble popped, at least we still had porn and Google. But Greenspan and company got America out of that bubble by creating another one – a worse one, which has bequeathed nothing but piles of bad paper and foreclosed subdivisions ruled by cougars and gators.

  In 2005 David Lereah, chief economist for the National Association of Realtors, released the housing bubble version of Dow 36,000: a book with the girthy title Are You Missing the Real Estate Boom? The Boom Will Not Bust and Why Home Prices and Other Real Estate Investments Will Climb Through the End of the Decade – and How to Profit from Them. Lereah appeared frequently on CNBC and was beyond bullish. In January 2007 he said that things had finally hit bottom. He was shit-canned that same year.

  In a Wall Street Journal interview, Lereah claimed that he was just following orders when he enthused about housing prices going up forever. The NAR pooh-poohs that, stating, “Realtors are the most trusted source for real estate information.”9 That’s like calling crack dealers the most trusted source for crack-related inquires.

  In my first book, Your Call Is Important to Us, which came out the same year as Mr. Lereah’s, I said that there would be beaucoup de foreclosures when Greenspan’s low, low interest rates rose. I’m not bragging. I know next to nothing about the real estate market and absolutely nothing compared to an expert like Mr. Lereah. But I knew that there would be a housing bust because I know that interest rates go up as well as down. And that house prices go down as well as up.

  The people who said that this boom would never go bust did so for two reasons. Some were just being deceitful, hucksters churning up hype to sell more junky investments and tricksy mortgages. But others were delusional and they actually believed their own hype. The narrow technical proficiency that helped engender investment instruments like credit-default swaps and derivatives blinded marketeers. They lost sight of the big picture, the broader economic and social trends, which eventually rattled and wrecked everything they had built based on their complex theoretical models.

  5. The money-minded are hung up on the past.

  Sadly, no. Would that this were so. The money-minded
have the opposite problem. Trading happens faster than ever, thanks to new computer models that move capital in milliseconds. The moneyed, like the media, are always seeking the new new thing. They never learn from their own history. Instead they forget the crashes and collapses of the past, whether they are as recent as the dot-com bust or as old as tulipmania. Or they claim that the old rules of finance no longer apply, acting as if we now live in an alchemical economy that can transform bad debts into good assets and spin gold from clutching at straws. All those New Deal fiscal regulations that Clinton and Bush repealed were put in place to prevent speculative excesses and market instability. But the money-minded argued that the regulations were outdated, antique, nothing but a drag on the brave new economy with its new technologies and trading formulas.

  One whistle-blower, Brooksley Born, a lawyer who briefly chaired the Commodity Futures Trading Commission, tried to warn the government that derivatives were exceedingly risky, but she was elbowed out of office by Greenspan and his posse. Born was flabbergasted by Greenspan’s breezy attitude towards fraud. Let the market sort it out, the head of the Fed said. It isn’t the government’s job to regulate that. The market is the best judge of the real and the fake.10 Look where that thinking got us.