Upon the Sand
“and everyone who heareth these sayings of mine, and doeth them not, shall be likened unto a foolish man which built his house upon the sand: and the rains descended and the floods came, and the winds blew and beat upon that house; and it fell, and great was the fall of it.” Sermon on the Mount, Jesus of Nazareth, quoted in “ The Gospel According to St. Matthew”, Chapter 7, verse 25-26
Jesus of Nazareth, who spent his whole ministry teaching though metaphors, certainly left a nice one for us to think about with regard to the late Hurricane Ike , the soon to be late Lehman Brothers Bank and the all too quickly to be late American economy. The pictures this morning, in full color and hi-definition, of houses floating in the Gulf of Mexico say much about those of us who choose to build our houses upon the sand, that is, just about each and every one of us. While not all of us have beach houses on the Texas coast, most of us have managed to sculpt our financial lives into a pretty nice sized sand castle. Many of those castles are more than 5,000 square feet with bathroom suites with double shower heads, gourmet kitchens and entertainment rooms featuring 48 inch flat screens and sound around sound (the audience is listening).
At the beginning of last year, Lehman Brothers paid out $8.7 billion in bonuses to their staff. Many of those hot shots getting seven figure bonuses for being able to hoodwink other rich guys (and a few middle class ones) into dumping real money (and some big corporations and governmental entities into dumping funny money) into the churning, soon to be burning American economy. I guess that if you held onto your seven figure bonus, it made it a lot easier on you to carry your belongings out in a cardboard box yesterday, while the soon to be not so big wigs at Lehman begged the Secretary of Treasury to assume some of the risk in a fire sale to whoever turned out to be the last sucker to buy Lehman stock. Alas, it was not to be, although Bank Of America swooped in and grabbed Merrill Lynch (we’re bullish on America) to add to their seemingly endless collection of down and out institutions. BOA is rapidly assuming the role of Mr. Potter in this newest production of “It’s a Wonderful Life.”
Potter: You and I were the only ones who kept our heads during the depression , you saved the Building and Loan and I saved everything else.”
George Bailey: “Well some might say that you stole everything else.”
When did we all move out of the rock neighborhood and begin to build our mansions upon the sand ? When did the great American dream turn into the great American scheme ? I guess that no one knows for sure. My belief is that it was the first time a fellow took his family to a big meal at “21” and paid for it with a Diners Club card, knowing that he did not have enough money in the bank to cover the check and hoping that he would have enough when the credit card bill came. After that, we quickly moved from a welfare economy, where a government redistributed income to “take care of everything you need” to a consumer society where the government borrowed enough money to “give you everything you want.”Under the old system we taxed and spent, under the new system, we just spent. We probably we reached our zenith a couple of years ago when it became possible to buy houses upon the sand even if your monthly income could never hope to support the monthly mortgage payment. The fact that we decided to do this at the same time that we began running a two country war and paying for drugs under Medicare probably hastened the collapse of the sand houses a good deal.
Now we will get to see it all wash away, float out into the Gulf or the Atlantic or the Pacific. It is a terrible thing to have a nightmare, but it is much, much worse to wake up from a beautiful dream, especially an American dream, and find your bed filled with sand. “Great” is the “fall of it”.