The Death of Honor in America

Deception is a product of contempt. So is betrayl, cynicism, dishonor, selfishness, duplicity, lying, mendacity and pretense. All derive from weakness and ultimately create despair.

Swiss psychologist Alice Miller theorized that contempt is nurtured by abusive parents, ultimately creating a narcissistic ego. That ego lives for a perceived external glory, while internally he cannot face his truth. The foundation of a narcissistic world is paiper mache. For a limited time, the ego can prosper. Yet, because it survives within internal conflict, it ultimately is doomed to failure. Thus, survival tactics are necessary to support its contemptuous world. Gradually, they destroy others.

From 1996-2000, the technology sector of the United States stock market was attracting a horde of investor cash. Yet, its companies were being built upon flawed business plans by twentysomethings whose computer savvy minds created internet portals destined to become creators of massive cash flow through acquisition of advertising dollars. Analysts began setting stratospheric price targets. In the case of one company, the price target was raised from $200 to $400. That target was reached in one day.

When Federal Reserve Chairman Alan Greenspan warned of "irrational exuberance", the world scoffed. Yahoo! bought Broadcast.com, making Dallas Mavericks owner Mark Cuban, its founder, a billionaire. Global Crossing was perceived as a sure winner, spanning cable across the oceans. JDS Uniphase became "Just Don't Sell Us." Intel and Texas Instruments became national heroes as their stock prices soared.

In late 1999, the blowoff began, when the combination of the Federal Reserve Board lowering interest rates to accommodate a potential Y2K global computer crisis. Cynicism began to consume investors. Cisco Systems sped past General Electric to become the market cap leader in America. Then...reality bit! Speculation fever dominated, until March 10, 2000, when the Nasdaq peaked. The paiper mache foundation began its collapse.

Despair dominated as the market plunged. The terrorist attacks on September 11, 2001 and collapse of Enron and WorldCom ultimately convinced the Federal Reserve Board to lower interest rates to one percent. The seeds of contempt were planted for an historic era in the real estate market.

Housing and land prices began soaring in 2004. In the name of social engineering, Congressional Democrats spent the mid-1990s insisting Bill Clinton compel Fannie Mae and Freddie Mac to provide funds for subprime mortgages to raise the percentage of home ownership in the United States. Combined with miniscule interest rates and creative loans, the relationship between supply and demand was skewed. All in the name of social engineering, Fannie and Freddie insisted morgage companies loan the funds they received, with the threat of withholding capital for future loans. The con was on.

Borrowers were not investigated for employment, income or fixed budget qualifications. Creative loans allowed borrowers to pay interest only for five years, with lenders, promising they could refinance at the end of the term. Great way for a lender to guarantee future business, isn't it? Buyers became convinced organic and immigrant population growth would guarantee prices never would return to their purchase point.

Speculators soon entered the market, buying and flipping homes in Southern California, Las Vegas, Arizona and Florida. Widows in Mississippi were given loans requiring no collateral to buy condominims which did not exist, for the sole purpose of reselling them. Luxury condominum complexes were planned throughout Las Vegas. Buyers were salivating like dogs whose master just yelled, "Alpo time!" They bought; they flipped.

In 2006, cracks began creeping into the exploding markets. The last flippers discovered the pool of suckers had evaporated. Home prices in San Bernardino and Riverside, California began plunging as commuters faced filling their sport utility vehicles with soaring gas prices. Foreclosures began lowering the values of other homes in once thriving neighborhoods. Those who bought at the peak in mid-2006, realized they faced a decline below their purchase price. But how far and how fast?

Foreclosures began consuming the Las Vegas and Phoenix markets. Condominium projects in Las Vegas were abandoned. Analysts questioned whether retailers were doomed due to the dwindling impact of home equity loans, especially while the price of gasoline neared $3.00 per gallon. Suddenly, the night speculation died arrived. Final puveyors of greed became responsible for homes they never could afford. Many were forced into bankruptcy. Global hedge funds which purchased many subprime mortgages, collapsed. The Enron syndrome had repeated itself.

Meanwhile commodities which thrived during the house building boom collapsed. Copper plunged from $4.00 per pound to less than $1.00. Oil, which had soared to more than $140 per barrel, began a steep decline in June 2008. Gold, which neared $1000 per ounce, slumped to near $700. Shares of gold and copper miners plunged.

And how is this sad tale of contempt ending? The federal government, which purposely induced but never regulated the overheated market, is primarily responsible for this disaster. Now it is investing in publicly traded companies to save the economy, clearly violating the tenets of American capitalism. The debt cannot possibly be repaid before mid-century, assuming the government finds some way for the private sector to restructure the health care system. Universal health care ultimately will create a similar burden as Social Security. Socialist answers to capitalist problems never work. They simply burden ensuing generations with massive debt.

The moral of the story is the narcissistic facade always will collapse. Paiper mache as a foundation cannot withstand the weight of a complicated life, especially its bad decisions. Narcissistis always will use capitalism to create manias to replace their emptiness with a grandiose self image. The rest watch the love flow until they are suckered into the frenzy. The alternative to this scenario is a restraint which won't allow it. But not in this America.

There simply is no honor.