Dirty, sexy money. When you consider that we created the concept of money and are now having national convulsions over the issue, the human race seems wildly insane. Though to be fair, we would have probably found a way to crash-land the Dow even if we were still trading sheep and bolts of cloth.
According to studies conducted at the University of Pennsylvania, the recent financial crisis has brought out the punishment instinct in the American masses and their representatives. Yes, there was irresponsible speculation on Wall Street, but if the bailout plan is really fueled by humanity’s need to punish renegades, we might as well forget about any recovery.
Punishment of large institutions, even entire countries, has never been proven to be successful for either side participating in the process. Think Germany during the Weimar era. After World War I, a furious Europe and the United States lashed Germany with massive restrictions, punishing the country by steeping it in debt and refusing to let its economy flourish. A desolate, humiliated and crumbling Germany gave rise to Adolf Hitler, and we all know how that story ends.
Similarly, after the Gulf War, the United States decided to punish Iraq by placing economic sanctions on the country, crushing their industry, starving the population and effectively planting anti-American sentiments into even the least interested Iraqi.
True, a severely punished Wall Street won’t exactly come after us with a blitzkrieg or maniacal dictator, but it could take longer to rebound, effectively hurting the American economy and obliterating any chances we might have had to find employment after graduation.
According to experts in the field of retaliation and forgiveness, our situation parallels that of Japan in the ’90s when the country was plunged into an extremely severe financial crisis. The Japanese government delayed in rescuing the failing banks due to its need to punish what they saw as corrupt and irresponsible behavior. This resulted in the crashing and burning of several prominent banks, as well as a soaring suicide rate.
In a letter written to his American comrades in 1918, Lenin, with full-blooded communist rhetoric, railed against the small group of American multimillionaires, holding the rest of the population as slaves to further their capitalist interests. Today, you hear the same kind of thing being said about Wall Street and its wards. Wall Street, Main Street and something about $700 billion has been repeated throughout American media outlets for weeks now, and the whole thing has spread more panic than information.
According to a New York Times article, University of Pennsylvania psychologist Robert Kurzban said Americans, and in particular small-business owners and those whose retirements have been affected, are feeling a heightened sense of betrayal toward Wall Street. The instinct for balance and retaliation is being fed and fueled with each day, with each investment bank that crashes and with each foreclosure.
It is quite possible that we, the public, with the support of our avengers of truth and justice (Congress) have set out to punish the moneyed evildoers who also happen to be the backbone of our economy and the keepers of much of our reputation in the international community. Michael McCullough, a professor of psychology at the University of Miami, was quoted in The New York Times saying that the punishment instincts “often promote behavior that turns out to be spiteful in the long run.” And we are going to have $700 billion worth of behavior to deal with.
Whatever you want to call it ““ this bailout, this punishment, this rescue ““ is going to leave Americans a mother lode of bills to pay. This is the biggest government intervention in the economy since the New Deal of the Great Depression and it has to be higher reasoning, not instinct, that governs it.
I am not an economics guru, and I don’t know exactly what the ramifications of this bailout plan are, but the mood is angry and the threat of financial failure is imminent. Here is to hoping that Congress’ solution works, and this controversial plan somehow evades the punishment instinct.