Charles Hugh Smith argues that our addiction to failure is a driving force in the financial market's peaks and valleys.
Are We Addicted to Failure?
Courtesy of Charles Hugh Smith from Of Two Minds
Are We Addicted to Failure?
Like all addicts, Central Planners are confident they can manage the monkey on their back. But this is a self-serving illusion.
Addiction is many things, but beneath its complexities it is a self-destructive expression of the desire to avoid or suppress pain. The pain might be physical or mental, memories or inner demons, or tortured misgivings about one's choices, soul and life.
Though the self-destructive aspects of the addiction are painfully visible to observers, to the addict they represent a solution. Perhaps not the ideal one, but a solution nonetheless.
To the non-addicted observer, addictions are not successes; they are failures. Those who care seek to extract the addict from the grip of his/her addiction, and from the fear that often drives it. Fear plays a part in many addictions–fear of life without the addictive salve.
I have recently been wondering if America is addicted to failure. The oft-repeated definition of insanity is doing the same thing over and over again and expecting different results, generally attributed to Albert Einstein.
But doing the same thing over and over again and expecting different results might be an addiction to failure.
Please consider this chart of the broad-based U.S. stock market index, the S&P 500, which I have marked up as an addiction to failure:
The source of this addiction is a fear of life without credit/asset bubbles. Fearing life without the rush and high of asset bubbles, we see an addiction to financial bubbles as a solution in the same way a heroin addict sees smack as a solution: not as a long-term solution or even a good one, but a solution nonetheless.
But bubbles inevitably leads to overdose and a subsequent self-destructive crash. Our central bankers/planners have injected enough monetary heroin into the nation to guarantee not just the rush and the high but the overdose that leads to a destructive crash.
Like all addicts, Central Planners are confident they can manage the monkey on their back. But this is a self-serving illusion; it's the monkey who controls the addict.
Perhaps it's time to confess that we're addicted to failure because we're too afraid to face life without this financial addiction.
As many of us know, it often takes a near-death experience to awaken the instinct for survival in the addict. Sadly, sometimes not even that is enough, and a once-great nation spirals down to ruin.
If you missed this week's series:
The Rot Within, Part III: Our Political Order Is Defined by Favoritism and Extortion
