Idiocy and the Accepted Terminology, a Financial Commentary by S.T.Lloyd

Accepted Terminology    the Dry Bones Blog

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You’ve got to use the accepted language in order to see things the “accepted” way.

~By Yaakov “Bones” Kirschen, Israel

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Ok, you guys know I’m just a l’il ole pea brain, but what is always amazing to me is when I wake up in the morning and the Lord has a post already going in my head before I even realize it.  This morning, it seems the Lord would like me to tackle the economy.  No.  He didn’t give me the solution to the trouble we are in, He just gave me insight.  He knows I need all of it I can get my hands on!

Here’s the thing; I have never taken a class in economics or finance.  I am not a numbers person.  In fact, it is safe to say my brain has a slight allergy to numbers. My eyes get glassy, my teeth start to itch, my throat swells, well you get the picture.  But we human “beans” have this God-given mechanism built into us, wherein when one area of our body is weak, another one compensates.  It is a known fact that the area of our brains that deal with numbers and the area that deals with words are two separate locations in the brain.  That is an oversimplification, but lets run with it. (That probably explains why my noggin is so lumpy!).

As I read about the additional 300 drop in the stock market last night, I guess that was what was on my brain when I went to bed and my mind must have been chewing on it while I slept.  My husband majored in business and finance, and he’s had all the classes, and well, you probably have figured out by now that I’m not one to let my utter ignorance on a topic stop me from delving into it.  How else is a person going to learn?  Since my and my hubby’s way of expressing ourselves is so different, we have found a workable “common language” in word pictures.  Maybe that’s a rudiment of cave days or something.  Grunts and chalk drawings.  I digress.

In contemplating the matter of America’s multi-trillion dollar debt and the economic mess of global scale which our world is now in, (all before having my second cup of coffee), it occurred to me that this whole mess truly amounts to a “the emperor has no clothes” scenario.

I mean, think about it, lets establish that I am a Christian and I am speaking from the perspective that in the beginning: God.  God’s way, God’s rules: order, grace, justice, all of those having their rightful place when He launched this human race.  K?  With me so far?

I’m going to take this whole tangled ball of twine and bring it down to a more elementary level. When I get myself in a bind to where I am forced to go borrow anything from someone else, I’ve already probably done something that violated God’s law, so there’s my first mistake, and now I have no choice but to borrow, which has a potential to end badly, I don’t care who you are.

If I’m going to borrow, then I’m going to at least try to be smart about who I borrow from, so I do my homework and I decide old Joe is a trustworthy sort, I’ve known him a lot of years, he’s honest, reasonable, we draw up our terms, including interest and penalties (fees meant to defray the potential risk the lender is taking on) and we shake on it.  Lets just agree for the sake of this exercise that Joe and I live in simpler times.  Times when a person was very likely to keep his word because if he doesn’t he knows he will answer for it to his Maker, and knows enough about that Maker to have a healthy fear of what that entails.

But lets say that over time, I develop some legitimate illness beyond my control that prevents me being able to get that loan paid off according to the terms, and now Joe is sort of in a bind himself, having planned to have that money back in his pocket by now.  Keeping in mind, Joe’s money fixed my initial problem, and while I was making my payments on time, Joe was still perfectly okay with the arrangement and it was not causing him any hardship.  But now that the deadline has come and gone, his budgetary plans have a monkey wrench thrown in.  He planned to add a new row of crops to his back field and the yield from that was going to help pay for the new tractor he has on lay away installment plan.  He has already paid a third of it, and his old one isn’t going to make it through the entire summer so he is in a pickle.  There is a deficit.  Let’s make it simple and call it a hole or a void.   An area in the vastness of space where there is nothing, not even space.  The elusive “not there” part of the donut, if you will.  A place amidst lots of something, where there is nothing

Along comes Oliver Opportunist, (we will just call him “O” for short), a sly sneaky sort of guy, and he reaches out into thin air and his imagination, and comes up to offer a solution to Joe.  (O is probably a lawyer).  O is not like the rest of us.  He knows words we’ve never heard and he has thrown off the societal restrictions that hold other people to certain, shall we say, standards?  (O is all about revolution).  O has a brilliant, ingenious idea.  He knows this because he is very impressed with it.  O has heard about this conundrum of Joes.  So O goes to Joe, and O says:” man, I hear you got yourself a problem.  Well, you’re going to be glad I happened along when I get done telling you the solution to your problem.  See, I know words.  Words you have never heard.  I have studied at the Ostendare* Institute of Fiscal Chicanery, and as luck would have it, there are all sorts of rudiments and extrapolations at our disposal for amending this situation which you likely do not even know about.  Isn’t that good news, Joe?

Removing his John Deere hat, Joe scratches his head and ponders this fellow a moment before responding.  “I reckon you are right about that, sir, seeing as how I didn’t understand but a handfull of them words that you just used”.

Ah, well, Joe, you just leave it to me, and I’ll have that vocabulary of yours filled out in no time.  But you don’t worry your head about that, you’ve got crops and all those other things to worry about.  I’m an expert and that’s all you really need to know.  So shall we get started?

Facts being what they are, that there were no options to be had five minutes ago, Joe figures he may as well give a listen to what this fellow has to say, so he agrees to hear his proposal.  It’s not that Joe’s not smart.  He’s just not Savvy**.

O proceeds to offer to buy Joe’s debt.

Keep in mind that in the history of mankind, this has never been done before.  Up until now, wealth has been generated by taking raw materials (what God made) and either taking them some place where they are needed, but not available/or abundant, or by taking raw materials from the ground and applying a skill and labor that transformed them into something few others are skillful or knowledgeable enough to produce, or by putting seeds (God’s creation) in the ground (try making your own dirt), and growing something needful that others must consume.  Whichever way you slice it, your basic elements are 1) What already exists because God made it. 2) Ingenuity and skill (also gifts from God)  3) Demand for the product/skill 4) Effort/work/labor applied to already existent raw materials, and of course 5) a need.

Now, I ask you, intelligent reader, what is Joe offering to buy?

Nothing!

That’s right, he is offering to buy nothing!  Now, you “experts” hold your horses.  I know right now you are spouting “economic principles” and chuckling over my naivety.  You think, that I think, I’ve made a certain point, while I’m the author of this here thing, and I am telling you, I haven’t come anywhere near making my point yet, so just sit back and zip your lip, Professor McSmarterthanMe, and try real hard to disengage the apparatus of your economic indoctrination and really strive to work within the limitations of, oh, actual common sense. (Yes, I have my very own brand of that, but indulge me).  I’m not asking you to check your brain at the door, just your baggage. Speaking of which…

Joe is left holding the bag.  It’s a bag of nothing.  A big old goose-egg.  Zero, zilch, nada, NOTHING.

O is offering to buy this nothing from him.

(I feel another digression coming on.  Is it just me, or is there something familiar about this nothing I’m going on about? Where else have we heard so “much ado about nothing”? What other subject besides economics, does nothing figure so prominently in? Anybody?***)

Ok, now, let’s do what those folks in possession of the business and finance/economics degrees are going nuts for us to do, and let’s go ahead and, for the sake of argument, pretend this is a legitimate thing of some actual value, this NOTHING O is offering to buy.

Lets go back to me, the borrower for a second. (That’s me.  Remember me?)  Ok, you could say that, based on honest natural immutable law, (as a Christian) when I borrowed money I opened up a stinky can of worms and forfeited my rights to make any kind of demands, but lets recall we have agreed to set this scenario in gentler times when a thing called common grace was still operational, as a general rule in the dealings between men.  When I knew I had to borrow, I made a purposeful choice to borrow from Joe based on his character which I knew to be above reproach.  Now, Joe is the lender, so “in principle” Joe holds all the cards, but in reality, Joe assumed a risk.  Also in reality, Joe himself now has seen that risk come to fruition, and where I once had a problem, now it is Joe who has a problem.

The solution O is dangling so temptingly before Joe, is (in case you are unsure) what I like to call a farce, a crock-o-blarney, a dam in a desert, like Oceanfront property in Arizona, well you know.

Joe actually knows this, that it doesn’t pass the smell test, but Joe is a simple fellow who also is growing a bit desperate, and he figures if this wise-acre hotshot with all the book-learning is dumb enough to give him a little bit of real money for his nothing, then he may as well take the offer, mitigate his own damages, and chalk it all up to a lesson learned.

Now, let me stop right here and just give you a strictly hypothetical example.  When I was in elementary school my family lived in a house, on a block where one man built all four of the houses on said block.  He built the first one, and lived in it while he built two others and sold them, and then he took his profits and built the last house on the end of the block, the nicest, most expensive one, as his and his wife’s “dream house”.  This man had two daughters, the younger one of which was closest to my age.  I didn’t like playing with her because she was very “privileged” and pampered and bossy and tended to have an inflated confidence borne out of being the center of her parent’s universe which seemed to have caused her to believe she could get by with anything, because, well, she always did.  If she wanted something that someone else had, (like a big sparkly rhinestone ring my grandpa bought me at the flea market) she would say “can I hold that for a minute?” If the kid (often me) was dumb enough to let her, she would then say something like “I’ll trade you my Miss America Barbie for this” and when you said no, she’d say “too late, you already did!”.  When I would try to get it from her she would scream bloody murder and go running to her mom who would come out and tell her to calm down and tell her what was going on.  Katie would then (oops, did I use her real name?) proceed to tell her Mom that I made a “deal” with her and then went back on my word, at which time her mother would turn to me and say “is that true?” I would answer “no”, but Katie, whose voice could rival the decibels of a jet engine, would talk over me and say “yes it is, she’ lying”.  At that point her mom would give me a “shame on you for lying” look, and say “Katie has never lied to me, and since I didn’t see what happened, I’m going to have to take her word for it, a deal is a deal, sorry kiddo”.  In all of the brouhaha, any thoughts of the Miss America Barbie were scattered in the gale-force winds of master-minded distraction, therefore Katie walked away with what was mine, while simultaneously retaining what had theoretically become mine.

Katie is a lawyer now.   But that story wasn’t about me.

Anyway, the reason I share this true story with you from my (bullied) childhood is because what Katie did to me is the same thing O is doing to Joe, in the sense that he has created a fictional alternate version of what is actually taking place. It is all “sleight-of-hand. He has carefully wrapped the illusionary transaction in legitimate-sounding terminology (the power of which is the point of the Dry Bones cartoon) and now Joe has “bought into” the illusion.

It’s a funny thing, investing in an illusion.  The more invested you become, the more credibility you stand to lose, therefore you become an unwitting disciple who finds himself powerfully motivated to maintain and further promote what you actually know to be an illusion, the survival of which depends upon the snaring of the next sucker down the line. Could this in some way explain the now four banker suicides in the past ten days?

Ok.  Joe’s off the hook, and here I am, the original borrower, over here limping along, still dealing with my handicap, when some fellow going by the name of O whom I have never met, shows up at my door with a hired goon shaped like the Hulk, and in an intimidating  fashion, informs me that if I don’t pay him the money I owed Joe, his sidekick is going to break my kneecaps.  Ok, it doesn’t happen that way these days (outside of Chicago and maybe Italy) so instead our modern-day equivalent is that phone call that comes every day at whatever exact moment that our gluteus maximus makes contact with that chair in front of our supper plate, and someone speaking poor English threatens to garnish our paycheck.  Someone we don’t recall having ever done business with.  Because they bought the debt from the guy who bought the debt from the guy who bought the debt from my great, great, great, great uncle Joe in 1891.

I never agreed to this!  I never borrowed money from this guy.  Who does he think he is?  O patiently (on account of the fact he has already assumed I am an idiot) explains to me that he has “bought my debt” from Joe, and therefore now I owe that money to him, plus all the fees he has arbitrarily decided to tack onto that.  Why, I am of a mind to call the sheriff on this O.  He has clearly lost his mind, and maybe escaped from the bin.  But then, the gorilla makes a threatening move, and I find myself convinced he means business, and I am sufficiently intimidated to actually speak words that indicate I understand these terms as he has explained them to me, and would I :please sign here”, which I do, just to get O and his sidekick to go away.

As another little aside here, and I reiterate, (lest you be dazzled by my acute financial insight) I am NOT a financial expert, but did you know that when a creditor “turns the matter of your debt” over to a collection agency, he has, indeed, passed along all information about your debt, along with your contact info, and that collection agency actually has no legal grounds to collect that debt?  The original lender has, however, surrendered his own legal grounds to collect it!  All the collection agent has is the intimidation factor.  He bought your “debt” for pennies on the dollar, and he is willing to operate within, and possibly just a smidge over the boundaries of the law, which he is counting on you to be ignorant of, to get at least that much back from you and probably more.  Of course, like O, he is wily, and is very likely recording your call in hopes that with his slickness he will manipulate you into saying certain words;  The right words, words which sound like you are concurring to actually owing him this money,(since you are a little unsure of it yourself) then he can use those words against you should it end up in a court of law.

Perhaps there is a good reason why in God’s rules of finance there is a thing called a seven-year Sabbath at which time all debts must be forgiven?  That God!  He is pretty smart!

So, lets pull this together. (Hey, try to keep up, will ya?)

What I am getting at is this:

It’s a fine mess we’ve gotten ourselves into!

I realize there are people all over the television and internet who have spent many years studying finance and economics.  Some guy named O started with his first sucker, and built a massive house of cards.  I don’t think that is oversimplifying it.  I think that this all can be “refined” down to a nutshell-size which even my pea brain can grasp.

This “creating out of thin air” an entire concept, is insanity, and yet is so common that I could probably write a similar story about the world of medicine, the world of politics, you name it.  In fact, these “alternative realities” have, indeed, been spun in all those other areas of human interaction and more.  Where humans have rejected the simple and existing laws and principles which immutably “are”, and creatively woven an alternate set of laws and principles, complete with it’s own  vocabulary and/or definitions, what is in operation at that point is, well….. voilà! Presto! The Matrix!

As all of this was going through my mind this morning, it sparked a discussion with my husband, remember he majored in Business and Finance.  He works in the credit industry.  He is familiar with both sides of the playing field, as it were.  He is in collections so he is very familiar with the “stupidity factor” which banks and lending institutions count on, and hears first hand from (for example) the teacher who opts to receive her full salary each working month of the ten month school year, despite the alternative of having the school hold back some of it so that she can receive disbursements all twelve months of the year.  This teacher will, instead,  live off of her credit cards over summer break, and then get angry when the lender deploys the fees and penalties she agreed to when she signed up for the cards.

It was humorous to watch my husband literally switch between roles.  I saw him go from speaking as a fifty-year-old who has been on the receiving end of those fees and penalties himself at times, to being a banker/economist defending the ludicrous situations I was pointing out, to again having disdain, but no pity, for the poor fools stupid enough to sign up for these abuses (Finance major).

Even he was struck by it.

But that is the nature of delusions.  They mess with the mind!

How many of you reading this, have ever walked into a bank with a spouse or potential business partner to talk to someone about a loan, and you realize your heart is pounding, your palms are sweating and you feel like you did right before the prom in high school?

Lets talk tangibles vs intangibles for a minute.  What really spurred this discussion over our coffee this morning (it’s fun living with me) is that I turned to my husband and asked him “who was the genius who came up with the idea of “buying debt” (paying for nothing).  His eyes lit up! (Aha! Finally! She asks me a question the answer to which I know!!!) He starts out giving me the “Finance and Business Degree” answer,  but soon he sees the knowing smirk on my face and realizes he is proving my point, (played at the hands of despicable me yet again), though he is not sure what my point is yet.

(Sorry, Babe). In my husband’s defense, I have a very strange mind and few there are who can keep up.  That’s meant for consolation for those of you who are still with me to this point in this post.  It says something about you. (You rode the short bus, too, didn’t you? 🙂 )

When his train catches up, he good-naturedly concedes the point (since he has no idea where it is anyway) and he sort of switches allegiance and we go at it as allies against the evil bankers for a few minutes.  Everything that I say, he then is able to springboard right into providing me with the applicable “world of economics”-approved official terminology for the financial principle which I am so fumblingly in my ignorance, trying to articulate.  Until he realizes once again, I’m further proving my point which is that essentially, make-believe words or definitions are at play here….

therefore the uninitiated will sound/appear/ feel stupid trying to speak intelligently on the subject…

which is why our hands sweat when we walk into a bank intent on getting a loan

which will ultimately serve to enrich said bank, and have us walk out feeling like they have done us a huge favor.

How did we get so stupid?

You see, sometime way back there when people used to deal in gold and silver, those who had plenty of it, would hire and pay someone to watch over their gold and silver for them.  You can’t carry all that stuff around with you everywhere.  No one has that many donkeys and camels!  Those treasure-minders then got the idea that it was a waste of opportunity to merely sit there guarding that stash for months on end.  Why, he doesn’t even check in, so this guard fellow figures why not find some poor peasant someplace who has nothing, and loan him a little bit of the rich guy’s money, for a fee, of course, under threat of death.  The treasure-minders found this to be a lucrative endeavor, and that is where the original principle of banking morphed into a business in and of charging a fee for the handling of real assets, according to my husband who does actually have some education in this department.  Two or three people, using the same ounce of gold, simultaneously back then, is no different from the Goldmart folks selling the same “theoretical” ounce of gold to several different customers, even while they oh-so-thoughtfully store that gold for you in their own vaults where you never see, touch, or have it.  Point being, you never have it!

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*Savvy is a word the intelligentsia use, the esoteric meaning of which is the equivalent to the Southerner’s “Bless your heart”, which is just a very polite way of calling someone an idiot. Intelligentsia is recently-coined adaptation (more truthfully probably just a misspelling) of the Latin word intellegentia.

**Ostendare is Latin for Ostentatious

*** Theory of evolution

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∞The moral of the story is, God’s way is actually better.  See Proverbs 22:7 & Romans 13:8