Financial Reckoning Day

Seeking Deception

"The world wants to be deceived," says a Latin proverb. "So let it be deceived." For example, the very investors who overshot the realistic value of the dot.com boom companies they invested in quickly clamored for the heads of corrupt corporate leaders once the boom went bust. Is such self-deception waiting down the road for the American economy at large?

Fallacy is a commonly traded coin of the realm. For example, Francis Fukuyama published a widely-noted essay entitled, "The End of History" in 1989 in The National Interest that suggested that all of history was a march toward democracy and capitalism. The collapse of communism meant the fulfillment of this parade, and thus history was at an effective end. In retrospect, given the stock market bubble’s collapse and the subsequent recession, the essay seems to promote an obvious fallacy. The lesson, however, is that the masses are easily deceived. Public opinion lurches with fashion from one popular myth to another. If you want to have any understanding of what’s going on in the markets, you need to understand history.

One reason Americans are set up for an economic collapse is their incurable...