Guest Post: On the Inherent Unpredictability of Life

Submitted by Leo Kolivakis, publisher of Pension Pulse.

Federal Reserve Chairman, Ben S. Bernanke, addressed graduates at the the 2009 commencement of the Boston College School of Law on Friday:

I am very pleased to have the opportunity to address the graduates of the Boston College Law School today. I realized with some chagrin that this is the third year in a row that I have given a commencement address here in the First Federal Reserve District, which is headquartered at the Federal Reserve Bank of Boston. This part of the country certainly has a remarkable number of fine universities. I will have to make it up to the other 11 Districts somehow.

Along those lines, last spring I was nearby in Cambridge, speaking at Harvard University’s Class Day. The speaker at the main event, the Harvard graduation the next day, was J. K. Rowling, author of the Harry Potter books. Before my remarks, the student who introduced me took note of the fact that the senior class had chosen as their speakers Ben Bernanke and J. K. Rowling, or, as he put it, “two of the great masters of children’s fantasy fiction.” I will say that I am perfectly happy to be associated, even in such a tenuous way, with Ms. Rowling, who has done more for children’s literacy than any government program I know of.

I get a number of invitations to speak at commencements, which I find a bit puzzling. A practitioner, like me, of the dismal science of economics–and it is even more dismal than usual these days–is not usually the first choice for providing inspiration and uplift. I will do my best, though, and in that spirit I will take a more personal perspective than usual in my remarks today. The business reporters should go get coffee or something, because I am not going to say anything about the markets or monetary policy.

Instead, I’d like to offer a few thoughts today about the inherent unpredictability of our individual lives and how one might go about dealing with that reality.

As an economist and policymaker, I have plenty of experience in trying to foretell the future, because policy decisions inevitably involve projections of how alternative policy choices will influence the future course of the economy. The Federal Reserve, therefore, devotes substantial resources to economic forecasting. Likewise, individual investors and businesses have strong financial incentives to try to anticipate how the economy will evolve.

With so much at stake, you will not be surprised to know that, over the years, many very smart people have applied the most sophisticated statistical and modeling tools available to try to better divine the economic future. But the results, unfortunately, have more often than not been underwhelming. Like weather forecasters, economic forecasters must deal with a system that is extraordinarily complex, that is subject to random shocks, and about which our data and understanding will always be imperfect.

In some ways, predicting the economy is even more difficult than forecasting the weather, because an economy is not made up of molecules whose behavior is subject to the laws of physics, but rather of human beings who are themselves thinking about the future and whose behavior may be influenced by the forecasts that they or others make. To be sure, historical relationships and regularities can help economists, as well as weather forecasters, gain some insight into the future, but these must be used with considerable caution and healthy skepticism.

In planning our own individual lives, we all have a strong psychological need to believe that we can control, or at least anticipate, much of what will happen to us. But the social and physical environments in which we live, and indeed, we ourselves, are complex systems, if you will, subject to diverse and unforeseen influences. Scientists and mathematicians have discussed the so-called butterfly effect, which holds that, in a sufficiently complex system, a small cause–the flapping of a butterfly’s wings in Brazil–might conceivably have a disproportionately large effect–a typhoon in the Pacific.

All this is to put a scientific gloss on what you probably know from everyday life or from reading good literature: Life is much less predictable than we would wish. As John Lennon once said, “Life is what happens to you while you are busy making other plans.”

Our lack of control over what happens to us might be grounds for an attitude of resignation or fatalism, but I would urge you to take a very different lesson. You may have limited control over the challenges and opportunities you will face, or the good fortune and trials that you will experience. You have considerably more control, however, over how well prepared and open you are, personally and professionally, to make the most of the opportunities that life provides you.

Any time that you challenge yourself to undertake something worthwhile but difficult, a little out of your comfort zone–or any time that you put yourself in a position that challenges your preconceived sense of your own limits–you increase your capacity to make the most of the unexpected opportunities with which you will inevitably be presented. Or, to borrow another aphorism, this one from Louis Pasteur: “Chance favors the prepared mind.”

When I look back at my own life, at least from one perspective, I see a sequence of accidents and unforeseeable events. I grew up in a small town in South Carolina and went to the public schools there. My father and my uncle were the town pharmacists, and my mother, who had been a teacher, worked part-time in the store. I was a good student in high school and expected to go to college, but I didn’t see myself going very far from home, and I had little notion of what I wanted to do in the future.

Chance intervened, however, as it so often does. I had a slightly older friend named Ken Manning, whom I knew because his family shopped regularly at our drugstore. Ken’s story is quite interesting, and a bit improbable, in itself. An African American, raised in a small Southern town during the days of racial segregation, Ken nevertheless found his way to Harvard for both a B.A. and a Ph.D., and he is now a professor at MIT, not too far from here. Needless to say, he is an exceptional individual, in his character and determination as well as his remarkable intellectual gifts.

Anyway, for reasons that have never been entirely clear to me, Ken made it his personal mission to get me to come to Harvard also. I had never even considered such a possibility–where was Harvard, exactly? Up North, I thought–but Ken’s example and arguments were persuasive, and I was (finally) persuaded. Fortunately, I got in. It probably helped that Harvard was not at the time getting lots of applications from South Carolina.

We all have moments we will never forget. One of mine occurred when I entered Harvard Yard for the first time, a 17-year-old freshman. It was late on Saturday night, I had had a grueling trip, and as I entered the Yard, I put down my two suitcases with a thump. I looked around at the historic old brick buildings, covered with ivy. Parties were going on, students were calling to each other across the Yard, stereos were blasting out of dorm windows. I took in the scene, so foreign to my experience, and I said to myself, “What have I done?”

At some level, I really had no idea what I had done, or what the consequences would be. All I knew was that I had chosen to abandon the known and comfortable for the unknown and challenging. But for me, at least, the expansion of horizons was exactly what I needed at that time in my life. I suspect that, for many of you, matriculation at the Boston College law school represented something similar–a leap into the unknown and new, with consequences and opportunities that you could hardly have guessed in advance.

But, in some important ways, leaving the known and comfortable was exactly the point of the exercise. Each of you is a different person than you were three years ago, not only more knowledgeable in the law, but also possessing a greater understanding of who you are–your weaknesses and strengths, your goals and aspirations. You will be learning more about the fundamental question of who you really are for the rest of your life.

After I arrived at college, unpredictable factors continued to shape my future. In college I chose to major in economics as a compromise between math and English, and because a senior economics professor liked a paper I wrote and offered me a summer job. In graduate school at MIT, I became interested in monetary and financial history when a professor gave me several books to read on the subject. I found historical accounts of financial crises particularly fascinating. I determined that I would learn more about the causes of financial crises, their effects on economic performance, and methods of addressing them. Little did I realize then how relevant that subject would become one day. Later I met my wife Anna, to whom I have been married now for 31 years, on a blind date.

After finishing graduate school, I began a career as an economics professor and researcher. I pursued my interests from graduate school by delving deeply into the causes of the Great Depression of the 1930s, along with many other topics in macroeconomics, monetary policy, and finance. During my time as a professor, I tried to resist the powerful forces pushing scholars to greater and greater specialization and instead did my best to keep as broad a perspective as possible. I read outside my field. I did empirical research, studied history, wrote theoretical papers, and established connections, usually in a research or advisory role, with the Fed and other central banks.

In the spring of 2002, I was asked by the Administration whether I might be interested in being appointed to the Federal Reserve’s Board of Governors. I was not at all sure that I wanted to take the time from teaching and research. But this was soon after 9/11, and I felt keenly that I owed my country my service. Moreover, I told myself, the experience would be useful for my research when I returned to my post at Princeton. I decided to take a two-year leave to go to Washington. Well, once again, so much for foresight. I have now been in Washington nearly seven years, serving first as a Fed governor, then chairman of the President’s Council of Economic Advisers. In the fall of 2005, President Bush appointed me to be Chairman of the Fed, effective with the retirement of Alan Greenspan at the end of January 2006.

You will not be surprised to hear that events since January 2006 have not been precisely as I anticipated, either.

My colleague, Bank of England Governor Mervyn King, has said that the object of central banks should be to make monetary policy as boring as possible. Unfortunately, by that metric we have not been successful. The financial crisis that began in August 2007 is the most severe since the Great Depression, and it has been the principal cause of the global recession that began last fall. Battling that crisis and trying to mitigate its effect on the U.S. and global economies has dominated my waking hours now for some 21 months. My colleagues at the Fed and I have been called on to take many tough decisions, including adopting extraordinary and unprecedented policy measures to address the crisis.

I think you will agree that the chain of events that began with my decision to go far from home for college and has culminated–so far–with the role I am playing today in U.S. economic policymaking is so unlikely that we could have safely ruled it out of consideration. Nevertheless, of course, it happened. Although I never could have prepared in advance for the specific events of the past 21 months, I believe that my efforts throughout my life to expand my horizons and to keep a broad perspective–for example, to study and write about economic and financial history, as well as more conventional topics in macroeconomics and monetary economics–have helped me better meet the challenges that have come my way.

At the same time, because I appreciate the role of chance and contingency in human events, I try to be appropriately realistic about my own capabilities. I know there is much that I don’t know. I consequently try to be attentive to all points of view, to work collaboratively, and to involve as many smart people in policy decisions as possible.

Fortunately, my colleagues and the staff at the Federal Reserve are outstanding. And indeed, many of them have demonstrated their own breadth and flexibility, moving well beyond their previous training and experience to tackle a wide range of novel and daunting issues, usually with great success.

Law is like economics in that, although it has its own esoterica known only to initiates, it is at bottom a craft whose value lies primarily in its practical application. You cannot know today what problems or challenges you will face in the course of your professional lives. Thus, I hope that, even as you continue to acquire expertise in specific and sometimes narrow aspects of the law, you will continue to maintain a broad perspective and willingness, indeed an eagerness, to expand the range of your knowledge and experience.

I have spoken a bit about the economic and financial challenges that we face. How do these challenges bear on the prospects of the graduates of 2009? The economic situation is a trying one, as you know. We are in a recession, and the labor market is weak. Many of you may not have gotten the job you wanted; some may have had offers rescinded or the start of employment delayed. I do not minimize those constraints and disappointments in any way. Restoring economic prosperity and maximizing economic opportunity are the central focus of our efforts at the Fed.

Nevertheless, you are in some ways very lucky. You have been trained in a field, law, that is exceptionally broad in its compass. At the Federal Reserve, lawyers are involved in every aspect of our policies and operations–not just because they know the legal niceties, but because they possess analytical tools that bear on almost any problem.

In law school you have honed your skills in reasoning, reading, and writing. Many of you have work experience or bring backgrounds to bear ranging from history to political science to the humanities to science. There will always be a need for people with your abilities and talents.

So, my advice to you is to stay optimistic. Things usually have a way of working out. My second piece of advice is to be flexible, even adventurous as you begin your careers. As I have tried to illustrate today, you are much less able than you think to foresee how your life, both professional and personal, will play out.

The world changes too fast, and too many accidents and unpredictable events occur. It will pay, therefore, to be creative and open-minded as you search for and consider professional opportunities. Look most carefully at those options that will give you a chance to learn new things, explore new areas, and grow as a person. Think of every job as a potential investment in yourself. Will it prepare your mind for the opportunities that chance will provide?

You are lucky also to be living and studying in the United States. There is a lot of pessimistic talk now about the future of America’s economy and its role in the world. Such talk accompanies every period of economic weakness. The United States endured a decade-long Great Depression and returned to prosperity and global leadership.

When I graduated from college in 1975, and from graduate school in 1979, the economy was sputtering, gas prices and inflation were high, and pessimism–malaise, President Carter called it–was rampant. The U.S. economy subsequently entered more than two decades of growth and prosperity. The economy will recover–it has too many fundamental strengths to be kept down for too long–and the mood will brighten.

This is not to ignore real challenges. Our society is aging, implying higher health-care costs and fiscal burdens. We need to save more as a country, to reduce global imbalances in saving and investment, and to set the stage for continued growth. Our educational system is strong in some areas, including our university system, but does not serve everyone equally well, contributing to slower growth and greater income disparities. In the diverse capacities for which your training has prepared you, many of you will play a vital role in addressing these problems, both in the public and private spheres.

I conclude with congratulations to the graduates, your families, and friends. You have worked hard and accomplished much. You have a great deal to look forward to, as many interesting and gratifying opportunities await you. I hope that as you enter or re-enter the working world, you make sure to stay flexible and open-minded and to learn whenever you can. That’s the best way to deal with the unpredictabilities that are inherent in life. I wish you the best of luck, with the proviso that luck is what you make of it.

And perhaps you will advise next year’s class to invite J. K. Rowling.

No matter how critical you are of the way this Fed Chairman is handling the financial crisis, I think his address should be read by all.

Life is inherently unpredictable and we will all come across personal and professional challenges. At the age of 26, I was completing my Master’s thesis in economics, critically reviewing the literature on growth empirics and convergence. I took a trip down to New York City with a buddy of mine and started feeling a pain under both my feet.

The pain was so excruciating that I couldn’t walk or sleep and yet there were no visible signs of anything wrong with my feet. My buddy was very concerned so we took a flight out to head back to Montreal.

My father and brother are physicians. They told me to go do an MRI. My father took me to the emergency room and after an hour long MRI, I was diagnosed with Multiple Sclerosis as there were lesions in my brain which pointed to MS.

Needless to say, I was devastated. I thought my life was over, but I was wrong. With the support of my family and friends, I mustered the strength to regain my composure, finish my thesis (I even got an “A” on it), and slowly got on with living life.

Over the years, my bout with MS has not been easy. Like it or not, it is incredibly frustrating when you lose control over your body and are aware of it. I also faced very difficult periods dealing with challenges at work and in my personal life.

But no matter how hard life gets, I try to focus on what I can do today and worry a lot less about what I might not be able to do in the future. I simply do not care about what other people think of me. I am done worrying about what others think of me. Either they accept me for who I am or they don’t.

The other thing I can share with you is that there is a beauty is in this inherent unpredictability of life. We are all here for a finite time, which is a gift in and of itself. What we do with our lives and how we cope with great obstacles is what ultimately defines each and every one of us.

I know that many people lost their job and are feeling the angst of the recession, but try to lead a healthy life, keep your focus and remember what’s ultimately important is your health, your family and your friends. If you can, go volunteer some of your time to see what real misery exists out there.

I hope that the Boston College School of Law does invite J.K. Rowling to address their graduates next year. Her mom also suffered from Multiple Sclerosis and with all due respect to the Fed Chairman, I find Ms. Rowling’s life fascinating and the very epitome of the beauty of inherent unpredictability of life.

On that personal note, I am heading out to enjoy the beautiful weather in Montreal with my friends and will spend time with my family later today. I wish all of you in the U.S. a very nice long weekend.

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  1. frances snoot

    Do Fed board chairmen write epistles from prison? LIfe unpredictable? Not in America: where one can be accused by the CEO of a major bank (Ken Lewis), while under oath, of obfuscating justice and of fraud and walk free to deliver (not an apology for helping bring down a sovereign state) but an admonition to be optimistic in the face of adversity. We can predict that justice will not be served, that men will walk free with our blessings and our enumeration, while those that have lost everything suffer persecution by the state for breaking ‘codes’.

    How can we Americans be optimistic when criminals walk free?

  2. Anonymous Jones

    I appreciate many of Bernanke’s thoughts in the speech transcribed above. Much of what he says is, in my opinion, appropriately reflective, and his prescription for thinking about one’s own predicaments is even perhaps solid.

    I do, however, have one major complaint. He says, “Things usually have a way of working out.” Well, that is simply untrue. They have worked out splendidly in my life, to be sure. And Bernanke has been extremely successful if one is solely judging his rise to power. Nevertheless that statement, “things usually have a way of working out,” is simply cognitive bias based on the survivorship effect. Bernanke and I can believe in this because, in hindsight, things usually did work out for us. This hardly applies to children who die because of poverty or disease, or a pedestrian who is run over by a drunk driver, or destitute investors driven to suicide because of malefactors who operate ponzi schemes.

    While it seems beneficial to one’s psyche to remain optimistic and attempt “carpe diem,” it seems equally detrimental to deny the reality of suffering around us. Yes, live for today but also plan for tomorrow. A balance can be achieved, but that balance will be elusive if we bury our heads, ostrich-like, in the face of the bleak situations that others face (especially when those situations are partially created by those of us who have enjoyed all the riches in life).

  3. Hugh

    Bernanke’s invocation of the unpredictability of life is just a re-statement of Condi Rice’s infamous: “No one could have predicted . . .?”

    This line has become the new last refuge of scoundrels, and it is demonstrably false since many of us did see the housing bubble in the making, knew it would burst, and predicted that it would take out most of the financial system and send the economy into a tailspin. We have seen too that most of government and Fed programs were not going to spark recovery because they so obviously avoided addressing any fundamental problems.

    Bernanke is basically saying that he gave a bunch of gasoline to your neighbor who doused your house with it. He and the neighbor then threw matches at your house. When it exploded and when up in flames, he was as surprised as anyone. “Who could have predicted?” Nevetheless, reacting quickly, he immediately filled up the neighbor’s swimming pool with water but somehow your house burned down anyway. Again “Who could have predicted?”

  4. Joe Costello

    Ben said, “Who has done more for children’s literacy than any government program I know of.”

    Really Ben, how about the two hundred year old American public school system? That’s a government program.

    Just, excuse my language, unfuckin unbelievable. This guy can in the last year be responsible for pouring several trillion dollars of GOVERNMENT money into the banking system and still be slagging off the government with the tripe of the last 30 years. Even more astounding is parents let their kids listen to it or a school of “higher education” invites him. Ben should be fired, period.

    At times the ludicrousness of the whole thing is just sublime. Power has no accountability in America, we have no self-government.

  5. DownSouth

    Well it all sounds wonderful, touchy-feely and all that stuff. But I think the narrative omits some important elements, the net result being that what Bernanke relates is at best a half-truth, and at worst an outright lie.

    For even though some, like Bernanke, may have won the lottery, this is of little overall social or economic significance. What matters is how the median fares. And if we take out the top 1% of earners, the median performance of the remaining 99% of Bernanke’s generation has fared dismally. Bernake of course knows this.

    Quoting Reinhold Niebuhr from Moral Man & Immoral Society:

    The educational advantages which privilege buys, and the opportunities for the exercise of authority which come with privileged social position, develop capacities which are easily attributed to innate endowment…

    Dominant groups indulge in other hypocrisies beside the claim of their special intellectual fitness for the powers which they exercise and the privileges which they enjoy… The middle classes were proud that their property, unlike that of the inheritances of the leisured classes, sprang from character, industry, continence and thrift; and they were therefore quite certain that any one endowed with similar virtues could equal the competence which they enjoyed. Failure to achieve such a competence was in itself proof of a lack of virtue. This middle-class creed sprang so naturally from the circumstances of middle-class life that it ought perhpas, to be regarded as an illusion rather than a pretension. But when it is maintained in defiance of all the facts of an industrial civilisation, which reveal how insignificant are the factors of virtuous thrift and industry beside the factor of the disproportion in economic power in the creation of economic inequality, the element of honest illusion is transmuted into dishonest pretension.~

    And then there’s Bernake’s ephiphany: all of a sudden he’s discovered that there’s chance in life. I counted 25 separate times he refers to chance in some wording or other–unpredictability, random shocks, diverse and unforeseen influences, less predictable, lack of control, limited control, accidents, unforeseeable events, chance, improbable, unpredictable factors, unknown, challenging, so much for foresight, never could have prepared in advance, contingency, you cannot know today, lucky, you are much less able than you think to forsee. Alright already! We get your drift! There’s absolutely no way you could have predicted the unwinding of the economy that began in August 2007.

    But you notice how the inability to predict always benefits a certain privileged group? Again quoting Niebuhr from his essay “Ideology and the Scientific Method:”

    It might be claimed that the ability to predict consequences of given events and actions is the real criterion of the adequacy of scientific procedures. Without conclusive predictions, the refutation of ideologically-tainted poltical policies becomes practically impossible; for every political argument involves and implies a prediction that the desired policy will redound to the general welfare. Refutation of such a claim would have to offer indisputable proof that the prediction is false. The proof would have to depend upon exact analogies between past and future events. Such proof is impossible.

  6. Leo Kolivakis


    My comment was not meant to be “touchy-feely” or to minimize the agony that many are living in this recession.

    The U.S. was always about the top 1%, not the bottom 99%. That is the capitalism you all voted for, not a Canadian or European style capitalism. You get what you vote for.

    There is this ingrained aversion to government in the U.S. that I never understood. Government intervention is all bad and the private sector can rectify all social ills.

    This, of course, is pure hogwash. You need the state to provide public goods like infrastructure, health care, education and defense.

    When you resort to the private sector for public goods, the results are disastrous. Many are left behind because profits allocate scarce resources to those that have capital.

    And the funny thing is that I am not a socialist – far from it. I believe in free markets and paying for performance based on clear and transparent benchmarks.

    But I also believe we need to provide basic health care to everyone, education and that the tax system needs to be totally revamped to benefit the majority who are struggling to get by, not the few elites who have access to an army of high-priced accountants.

    In short, society should defend its most vulnerable citizens, including the old, the poor and the disabled, not the rich elites who often just collect interest on capital, offering little in return.



  7. frances snoot

    The Titanic has been ruthlessly engineered onto an enormous iceberg; the Captain bravely addresses the lawyers arraigned in lifeboats amongst the bleak gray armistice:

    …stay optimistic…things usually work out…be flexible about your career choices…

    We could not predict that running this vessel full-speed ahead with no regard to risk would have results: it was really a butterfly in China that ran this vessel broadside an iceberg.

    You went to lawschool for all these years and now, well, you are in the lifeboats. Good luck, godspeed, and ask Rowlings about magic; you’ll need it.


  8. frances snoot

    “There is this ingrained aversion to the government in the US that I never understood…”

    It’s a freedom thing, Leo, you wouldn’t understand.

  9. Leo Kolivakis

    frances snoot wrote: “It’s a freedom thing, Leo, you wouldn’t understand.”

    Like the freedom to walk in the worst parts of town without the fear of getting mugged or walk into an emergency room and not be refused to get treated because I don’t have medical insurance?

    Please explain to me how exactly Americans are so much freer than the rest of us living in the G7?

    George Carlin was right when he noted that “’s called the American Dream because you have to be asleep to believe it.”

    Enough with this jingoist, flag waving nonsense. I love the U.S. and most Americans but every time I see them falling for patriotic nonsense of “freedom”, I say to myself, thank God I live in Canada.

    I can’t live somewhere where most people get brainwashed into believing nonsense.



  10. frances snoot

    And we flag-waving, jingoists say, “Three cheers for Leo living in Canada! Hip Hip!”

    I think we might be discussing states rights vs. federalism, but it seems that Leo wants to throw in the entire G7 social-economic nightmare and claim that if we bow in submission and leave behind the “American dream” we will all gladly receive multitudes of bounties from our kind and generous central planners and broad-minded publican do-gooey-ewers.

    Guess what, Leo? The G7 is spiralling into debt default due to rash spending.

    In the US, we fear muggings by the police. Our socialist planners give the illegal immigrants free medical at the emergency rooms.

    Freedom is not and never will be ‘patriotic nonscence’. We Americans absorbed the love of liberty from our youths, and agree with Walt Whitman and cry: Liberty will be the last to leave.

  11. DownSouth


    Thank you for your response. There’s nothing in your reply that I disagree with.

    And forgive me if I seemed to dismiss the exceptional circumstances of your life that you had to overcome. Individual effort and achievement should never be discounted. But I think that tells only half the story. In addition to your drive you had opportunity, given to you by your family, your friends and your country. I have lived in Mexico for the past 10 years, and I see intelligent, eager, hard-working young people every day, born to humble families, who have almost no possibility of escaping their circumstances. Sure, if you happen to be that 1 in 10,000that’s born with some special gift that sets you above the rest, there maybe escape. But for the rest, there’s simply no opportunity, no path to self-improvement, and this is no fault of the individual.

    But back to Bernanke, you’ve got to admit that all his protestations of the inability to predict are a little over the top. Mexican writers many years ago discerned the US’s profligate ways, predicting they would eventually lead to its demise, and incessantly bemoaning the fact. They knew that when the U.S. went down, it would take Mexico with it. Here’s just one example, written by Carlos Fuentes back in 1992:

    Spain also became the first example of an anomaly that the United States runs the risk of repeating as our own century ends: that of being a poor empire, debt-ridden, incapable of solving its internal problems while insistent on playing an imperial role overseas, but begging alms from other, surplus-wealthy nations in order to finance its expensive role as a world policeman.
    –Carlos Fuentes, The Buried Mirror~

    It seems to me practically everybody saw what was coming, minus Bernanke and company. I see his screed as highly exculpatory and highly self-serving, and I’m not buying it. And in this I don’t believe I’m alone.

  12. Leo Kolivakis


    You are absolutely right, unlike those poor young, intelligent Mexicans you see struggling down there, I was fortunate to live in Canada and have my family and friends support me when I needed them.

    As far as Bernanke, you are right:

    “It seems to me practically everybody saw what was coming, minus Bernanke and company. I see his creed as highly exculpatory and highly self-serving, and I’m not buying it. And in this I don’t believe I’m alone.”

    It is impossible that Roubini, Dean Baker and countless others, including me, who saw this disaster coming a few years ago. And the Fed in all its infinite wisdom didn’t see this was going to end badly. Give me a break.

    But the banksters control the Fed and they control American politicians. But don’t tell that to frances snoot, who believes freedom is alive and well in the United States.

    Sure it is, if you are brain dead.



  13. frances snoot

    “The banksters control the Fed and they control American politicians…”

    But we Americans should give that motley crew the rights to our health care system?

    No, wouldn’t THAT be brain dead?

  14. DownSouth


    Yep! I’ll leave you with a quote that seems most apropos:

    The American Negro has the great advantage of having never believed that collection of myths to which white Americans cling: that their ancestors were all freedom-loving heroes, that they were born in the greatest country the world has ever seen, or that Americans are invincible in battle and wise in peace, that Americans have always dealt honorably with Mexicans and Indians and all other neighbors or inferiors, that American men are the world’s most direct and virile, that American women are pure. Negroes know far more about white Americans than that; it can almost be said, in fact, that they know aobut white Americans what parents–or, anyway, mothers–know about their children, and that they very often regard white Americans that way. And perhaps this attitude, held in spite of what they know and have endured, helps to explain why Negroes on the whole, and until lately, have allowed themselves to feel so little hatred. The tendency has really been, insofar as this was possible, to dismiss white people as the slightly mad victims of their own brainwashing.~
    –James Baldwin, The Fire Next TimeBy the way, I’m not black (German-French-Native American mongrel here) but am a native U.S. citizen. But there are a handful of black American writers–James Baldwin, Ralph Ellison, Martin Luther King, Jr., Cornel West, Henry Luis Gates, Jr–who I count amongst my favorites. And I do believe they have brought to the table a different way of seeing things that can be quite helpful in expanding one’s vision.

  15. AngriestOfAll

    “Like weather forecasters, economic forecasters must deal with a system that is extraordinarily complex, that is subject to random shocks, and about which our data and understanding will always be imperfect.”

    Wrong. Economists like to use the weather analogy because it distracts us from what’s really going on. High profile and/or influential economists have simply become shills in a huge con game. A human being is a complex system, but an average con artist can influence that complex system to do pretty much whatever they desire by using the marks fear and greed against them. A conglomeration of human beings can be viewed as just a larger collection of fear and greed. Little burps can happen along the way, with unpredictable, natural events, or even sudden global events. We are not experiencing a “black swan.” This a bunch of hooey. For years the concept of free-markets was sold top down from the most vaunted educational institutions in the world right down to the individual house flippers. Regulations were systematically chopped out or bypassed. The top 1% of the wealthy sucked up the skim from the inflating credit bubble, and as it deflates they are out buying assets at “fire sale prices,” right Jamie Dimon? Wink Wink. You really fooled us guys. Except that you really didn’t know what you were doing, did you. Did you expect 30%, 40%, 50% unemployment? Did you expect the unrest and violence that would attend it? Maybe you thought you did, but when some crazed, hungry “marks” hop the wall at your Hamptons estate and comes straight for you and your family? did you think it through that far? At that point you will probably quickly realize that *you* were a bit too greedy? That *you* are the degenerate?

    So Ben, if you really believe this baloney, you’ve been duped by criminals. If not, you are one yourself. Take your pick.

    Maybe they sold it to you this way: “Ben, you are going to play a key role in leveling the economies of the entire world. It will take decades, but from the ashes will rise a shining, new, egalitarian system worthy of the human race.” Was that how they put it? If so, you’ve been had, pal.

    This is not weather prediction; this is social engineering. Much, much easier, and don’t let them try to convince you otherwise, sucker.

  16. frances snoot

    @Down South:

    A full deck of cards always contains the race card. But freedom in America (thank-god) is not reliant upon a Race or a system of indoctrinated Mythology: but based upon a Bill of Rights which (thankfully) now applies to all races and creeds.

  17. Leo Kolivakis

    frances snoot writes: "But we Americans should give that motley crew the rights to our health care system?"

    No, leave it up to the for-profit HMOs who are doing a wonderful job wrecking your health care system. Just ask doctors and patients in the U.S. what they think of HMOs.

    When will America come out of the Dark Agexs and realize some public goods like education and health care – are best left up to the state and federal government?

    Look, universal health care and free education is not a panacea. We have problems in Canada too. But I prefer our brand of capitalism, with all its faults, over the one in the United States.

    And I might add the banksters control our politicians here too. That is why our banking system is a monopoly where the banks control fees on everything.

    Not perfect, but compared to the U.S. banking system which is in shambles, requiring massive federal bailouts, I'll take our monopolistic banking system with all its shortcomings.

    >>DownSouth, thanks for sharing that quote.



  18. Todd Wood

    Talking about freedom, eh? (See Grand Funk Railroad)

    Or, Freebird..?

    No worries.

  19. frances snoot

    BBbbbut freedom means choice, and government run health care eliminates choice: creating a triage system where, as Angriest relates, life becomes a game of social engineering. Already the sway is to eliminate freedom to vitamins and whole foods, already the old are marginalized to make way for the young. The system in Canada will not exist in America: America is bankrupt as our President announced on Saturday. Americans will endure triaged care.

    It is not racist to cling to our Constitution; it is not brainwashed or giddy to believe in the freedom to make choice and not rely on a tyrant to make it for one or for one’s family.

  20. frances snoot

    “when will America come out of the Dark Ages”
    Um, looks like we are headed for the Dark Ages what with cap and trade energy programs set to raise the energy price 30%, but that’s okay. Americans are ‘brain-dead-children’ that need the grownup Eurosocialists to feed us medicine we don’t like.

  21. skippy

    @frances snoot,

    Your American liberty, is on the backs of the sucked dry lessors of this planet, you would by your birth right (American citizenship) and your words “American dream/freedom” diminish all others for your Continental ideology’s. I would see you support you and yours off your own back, with out assistance, save your American pioneering skills.

    snoot said…We Americans absorbed the love of liberty from our youths, and agree with Walt Whitman and cry: Liberty will be the last to leave.

    Do you mean the time young Americans spend in Disney Land and the last to leave are the ones attached to its illusion.

    Skippy…America has always had much of what you decry, seems the elastic waist band on your American dream is fraying and soon to reside at your feet, exposing the nakedness of your ideology.

  22. Todd Wood

    I love success stories. The are so full of hope, except that their shadow is composed of the ones “who didn’t make it.” I’m really more interested in them. That is where the real action is.

  23. frances snoot


    I am assuredly appalled at American Imperialism; but the “backs of the sucked-dry lessors” were imperilled by more than just the ideology of individualism. What? The French did not provide the machetes for genocide in Africa? The Chinese are not solicitizing slave labor in Africa? The UN troops are doing justice in Haiti?

    I am only advocating a love for individual liberty and rights and an unashamed right to love the sovereignity of the individual according to the rights delineated by our own legal documents.

    I was quoting Whitman, and he was referring to the inability of status tyranny to destroy human individualism. Leaves of Grass celebrates both the glory of the individual and the beauty of human unity.

    I wouldn’t mind pioneering, but am a bit bothered by alligators and spiders.

  24. frances snoot

    “the banksters control our politicians here too”

    Leo: Seems I read somewhere that the Queen cancelled Parliment in Canada last December.

  25. DownSouth

    @frances snoot

    Well Mexico certainly offers a case study of what happens when a country follows the path of the anti-government proselytizers.

    Mexico, like all countries, is a product of its history. The Tlatelolco Massacre in 1968, in which several hundred students participating in a peaceful protest were gunned down by police and military personnel, completely transformed the country’s political landscape.

    In the aftermath of that atrocity, it was no longer possible to keep from public view the internal rot that had spread throughout the government and criminal justice system. The people correctly concluded that the government no longer served their interests and could not be trusted. Corruption was ubiquitous, the situation having deteriorated to the point that Amatai Etzioni warns of in The Moral Dimension: “If those whose duty it is to set and to enforce the rules of the game are out to maximize their own profits…there is no hope for the system.”

    But instead of doing the difficult and tedious work necessary to fix the system, the path Mexicans chose was to greatly curtail the power of government. Mexico thus became a libertarian’s wet dream. Mexicans sum it up as follows: El mas bravo gana–The most ferocious wins.

    Mexico is now suffering the acute consequences of this folly. Not only is the country falling into anarchy with gangland-style murders occurring on a daily basis, but the eviscerated government is powerless to act in the face of ever-growing abuses of wieldy economic actors. The result is that the ruling economic elite competes with drug capos in the minds of the people to see which does the most damage to the common good.

    Here is but one example of what I’m talking about. From the NY Times:

    Carlos Slim Helú: The Reticent Media BaronThe country’s Federal Competition Commission is looking into Mr. Slim’s companies. But the agency is outspent and outmanned by Mr. Slim. His companies “spend more on a single case than our entire annual budget,” said an official at the commission, who insisted on anonymity because he was not authorized to speak publicly about agency matters.~

    A “monopolistic culture” has thus engulfed Mexico. The fortune of Slim, perhaps the richest man in the world, is equivalent to 7% of Mexico’s GNP (La Jornada, “Articulista del New York Times destaca que en Mexico impera la cultura monopolica", August 28, 2007, p. 21) . Compare that to Bill Gates or Warren Buffet, whose fortunes represent less than ½ of 1% of U.S. GNP.

    frances snoot, yours is a recipe for anarchy.

  26. frances snoot

    @Down South:

    Are you recommending we all become appendages, all part and parcel of the great Leviathan that Hobbes invisioned? In what part am I to advocate ‘anti-government’ action? Mr. South, you assume greatly on my behalf.

    I believe there are many, a legion, here in our still-sovereign state that uphold the Constitution as the legal precedent for law and action, for all in government and the military here swear to uphold the Constitution against all enemies, foreign and domestic.

    Shall we not trust that those in power that take an oath of allegiance to a legal document are sworn to uphold the tenets of that paper?

    Or has the constitution become “just a god-damned piece of paper” and those who delight in its precepts “enemies of the state.”

    I would assume then that the state of the Union here in America has been hijacked by foreign interests!

    History is a product of men: a storied layering of clever manipulation.

  27. DownSouth

    @frances snoot said: “I am only advocating a love for individual liberty and rights and an unashamed right to love the sovereignity of the individual according to the rights delineated by our own legal documents.”

    Wrong again.

    The preamble of the Constitution gives the reasons for promulgating the constitution. They are “to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our prosperity.”

    And in order to advance these goals, there certainly do not exist the limits on governmental coercive power that you and other libertarians imagine.

    The perennial error of the libertarians is to confuse what Jefferson and Madison called the “internal formum” with what they called the “external forum,” wrongly according the same protections to the latter that are rightly due the former. As David Little wrote in “Religion and Civil Virtue in America:”

    Jefferson and Madison presupposed a crucial distinction of longstanding significance in the Western Christian tradition between what was called the “internal forum,” or conscience, and the “external forum,” or civil government. Accordingly, human beings were believed to be subject to “two laws” and “two governments”–one an inner law of the spirit, enforced by reason and reflection of the mind and heart, and the other, a outer law, enforced, finally, by the magistrate’s sword…

    Set apart from the outward moral sphere, according to the tradition on which Jefferson drew, is the inner sphere, the strictly religious sphere. If morality, at bottom, concerns the regulation of physical, or outward, injury by physical, or ourward, means, religion concerns the regulation of the inner, or spiritual, life by inner, or spiritual means. This implies that the life of the spirit may not be regulated by outward, or physical, coercion. It must, that is, be left completely free to follow its own inner laws and dictates. Therefore, a much greater range of personal discretion and determination must be permitted in the “things of the spirit” than in the “things of the body.”~

    The “internal forum” has been expanded somewhat from its original strict meaning of religious freedom, but surely not to anywhere near the extent that the libertarians would have us believe. As the legal scholar Leo Pfeffer wrote:

    Certain it is that religous liberty is the progenitor of most other civil liberties. Out of the victory in the struggle for freedom of worship as one’s conscience dictates came victory in the struggle for freedom to print religious tracts [and therefore, eventually freedom of the press]…[F]reedom to assemble politically can be traced to the struggle of freedom to assemble religiously.

    Jefferson also made it clear that the physical, moral or outward forum is not something that is permanent, but can change over time. Quoting David Little again:

    [T]he virtues of conscientiousness–of scruplous honesty, rigorous self-examination of belief, relentless consideration and evaluation of alternative points of view, and persistent application of principle to practice–constitute the fundamental ideals of a free society, whatever may be the particular conclusion in favor of belief or unbelief of a given individual at a given time.~

    Therefore you are free to form your own opinions in regards to the physical, moral or outward forum. You are also free to use the freedoms of speech and press to persuade others to embrace your opinions regarding the physical, moral or outward forum. But to state that your opinions regarding the physical, moral or outward forum are “rights delineated by our own legal documents” is nothing but self-serving nonsense.

  28. frances snoot


    True, I am a nominalist, but false, I am not an anarchist.

    Your ideal “state” must needs be declared a subjective fantasy, according to Article X of the Bill of Rights:

    The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

    The powers (rights under legal contract) not delegated to the United States (Federal Union, seat of governed) by the Constitution, nor prohibited by it to the States, are

    Reserved to the States

    People usually attend to a corporeal form and have substance, as well as consciousness. I would assume this is the forum that this amendment addresses. Rhetoric aside, this amendment is the basis for the secession legislation being served in numerous states. Do we only have interpretations for evidence as to the changing body of the corporeal and rights? This sounds distinctively Hegelian.

    The tenth amendment revealed the Intent of the founders of our Republic to protect the rights of the individual as sovereign over the self-serving interests of social scientists and busy-bodies.

    btw. Where was I wrong before?

  29. juan

    Capital depends on labor but not labor still in possession of its own means of production, rather, labor which has been separated from these and has nothing to sell other than itself.* Or, the freedom being spoken of has been a necessary feature of the capital system.
    That the early class of revolutionary capitalists, requiring free wage labor on one hand and ending of feudal regimes on the other would place emphasis on individual freedom is, IMO, less surprising than the apparent resilience of such an ideology.

    *I omit the role of (ongoing) primitive accumulation.

  30. frances snoot


    So under what economic system would society find itself free from parasitical barnacles? Just curious…

    Fractional reserve banking=individualism?
    Was this your premise?

  31. autodidact

    Yes, there is cause for some optimism. No matter what government does to screw things up, often people are able to find a way around the taxes and regulations, create new value, and prosper in the marketplace in spite of the intellectual Lilliputians in government trying to tie us down.

  32. Anonymous Jones

    It is so disheartening to read a comment thread like this, where the angriest voice is always born of the one who has no conception of the limits of intelligence or knowledge. Of course, it would be impossible to be so angry upon encountering different viewpoints if one had a true conception of one’s own limitations in these areas.

    It would be the height of hilarity if it were not so destructive. One person reads the tenth amendment out of context and is certain, absolutely certain, in the face of two hundred years of constitutional law, millions upon millions of pages of scholarly work on the subject, that everyone else is ignorant, that everyone else is stupid, that the truth is *so clear* that it would be inane to miss it. Sorry, try again.

  33. frances snoot

    @anon jones:

    I am sorry that you misinterpret my words as angry postulations. I think perhaps you are waxing into hyperbole:

    “millions upon millions of pages of scholarly work on the subject”


    I never indicated that I considered anyone ignorant, on the contrary, my posts were declared ‘braindead’ and ‘self-serving nonscence’. I did not marginalize anyone’s opinion by attacking their person.

    But that is to be expected. The crushing of dissident voice is a necessity for the advancement of the Hegelian state. I could be laughed off if I were not more of a danger. “It would be the height of hilarity of it were not so destructive.”

    Thankfully, we may pull the amendments of the Constitution “out of context” and hold them dear, for they were termed “The Bill Of Rights” for a reason.

    It would be well if my person were not attacked and only my words or logic.

    Curious, really, as to what the limitations of intelligence and knowledge are to which this post refers. Goodness, are we to limit the imagination as well? Shall we all decide what part of the communitarian leviathan we would like to become? Does the hand rail at the foot? Of course not.

    Silly, wrathful, ignorent me, to insist on the right to autonomy when the true ‘constitutional scholars’ are readying the world for Frankenstein’s monster.

  34. Leo Kolivakis

    @frances snoot:

    I posted a speech by the Fed Chairman and a personal message of hope and you sort of hijacked the comments with your warped view of liberty. The freedom you speak of simply does not exist.

    The most important thing in life is your health, your family, your friends. Freedom is meaningless without those.



  35. frances snoot

    Dear Mr. Leo:

    I am sorry you feel that I “hijacked the comments” on your blog. I was addressing comments aimed @Frances Snoot, not merely holding a subversive masturbatory diatribe on your air time.

    I will be careful in future to avoid posting on this blog. Feel free to run as a wolf pack with Leo as the Alpha Male. I prefer not to be nipped.

    As for, “The freedom you speak of simply does not exist,” I am quite sure this is not a question of existential prerogative, of love for family and friends trumping self-serving interests, or of one lone voice surrounded by a realm of constitutional legal precedent. The freedom of the sovereign individual is a just right apportioned limitless, but substantiated by the individual’s response to tyranny.

    We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain inalieanable rights…life, liberty, and the pursuit of happiness.

    So, I’m off to pursue happiness, a typical ‘childish American sentiment.’

  36. DownSouth

    @frances snoot said: “Where was I wrong before?”

    You are wrong in at least two regards:

    1) In spite of overwhelming evidence offered by current events, you refuse to acknowledge the social anarchy and political irresponsibility which the theory you champion sanctions, and

    2) You attempt to endow your theory with dishonest pretensions of universality. There is of course nothing new to this. As Niebuhr wrote:

    Differences in faculty and function do indeed help to originate inequality of privilege but they never justify the degree of inequality created…

    Since inequalities of privilege are greater than could possibly be defended rationally, the intelligence of privileged groups is usually applied to the task of inventing specious proofs for the theory that universal values spring from, and that general interests are served by, the special privileges which they hold.~

    The rhetorical strategy you employ to this end is to try to wrap your theory in the Constitution. However, this strategy encounters two almost insurmountable hurdles. First, it requires us to accept your version of American history. And second, it requires us to accept your reading of the Constitution the one true interpretation. The problem is that the historical record does not support your take on history, nor does a vast body of scholarly research support your interpretation of the Constitution. But in spite of having all this pointed out to you, you still cling to your theory.

  37. DownSouth

    I might add that the thing I find most intriguing about all this is what Leo alluded to when he said: “That is the capitalism you all voted for, not a Canadian or European style capitalism. You get what you vote for.”

    For me the great conundrum is: “How do you get 50%+ of Americans to vote in favor of a regime that benefits at most 5%, and probably less than 1%, of the population, and very much operates to the detriment of the rest?”

    Kevin Phillips lays some groundwork in providing answers to this question in American Theocracy. He concludes that most evangelical Christians do not vote their pocket books. But evangelical Christians only make up about 50% to 60% of the Republican coalition. Assuming the economic policies advocated do actually serve the interests of 10% of the coalition, then who makes up the remaining 30% to 40% of the Republican coalition? And if their motivation for voting is not religious, then there must be some other secular ideology which inspires them to vote counter to their economic interests.

    It is the crafting and selling of this secular ideology–what I call irrational rationalism–to a rather significant chunk of the American electorate that I find of utmost interest.

    Both types of fundamentalisms–the religious and the secular–present grave dangers to democratic governance. Niebuhr elaborates on the threat secular fundamentalisms pose to democracy in “The Children of Light and the Children of Darkness:”

    The inadequacy of the presuppositions upon which the democratic experiment rests does not consist merely in the excessive individualism and libertarianism of the bourgeois worldview; though it must be noted that this excessive individualism prompted a civil war in the whole Western world in which the rising proletarian classes pitted an excessive collectivism against the false individualism of middle-class life. This civil conflict contributed to the weakness of democratic civilization when faced with the threat of barbarism. Neither the individualism nor the collectivism did justice to all the requirements of man’s social life, and the conflict between half-truth and half-truth divided the civilized world in such a way that the barbarians were able to claim first one side and then the other in this civil conflict as their provisional allies…

    The success of Nazi diplomacy and proaganda in claiming the poor in democratic civilization as their allies against the “plutocrats” in one moment, and in the next seeking to ally the privileged classes in their battle against “communism,” is a nice indication of the part which the civil war in democratic civilization played in allowing barbarism to come so near to a triumph over civilization.

  38. Todd Wood


    I wouldn’t just leave it there…


    The void space from which time
    Unfurls and licks your face with
    Impressions and sensation of me
    Is ourselves into which we are now being born.

    We surf on this consequence of earth and sky
    Towards certain embrace.
    Love blooms in the cracks of our union.

    The sky overhead turns red.
    We hold hands to witness the end.
    Earthquakes approach like racing locomotives.

    The tide sweeps out to sea and
    A wall of water
    Silently bulges at the horizon.

    It is all I can do to hold you.
    Your eyes soften and your
    Arms hold me tighter.

    Tectonic pressure swells the core and
    The crust breaks.
    The volcano barks, pumping
    Magma out onto the valley below.
    The water passes overhead and
    Our bodies drift towards new shores.

    Of voided space I speak
    In our time voiding time.
    But the ongoing moment of us
    Fills reality voiding the void.
    We wriggle in this warm pond
    Of possibility, together, forever gone.

  39. Leo Kolivakis


    This is not MY blog, nor am I an alpha male. I think you missed the point of this post and your ideological stance flies in the face of overwhelming evidence that some form of government is required to better allocate public goods.


    Nice poem but I prefer ending it with Robert Frost's Road Not Taken:

    Two roads diverged in a yellow wood, And sorry I could not travel both And be one traveler, long I stood And looked down one as far as I could To where it bent in the undergrowth;

    Then took the other, as just as fair, And having perhaps the better claim, Because it was grassy and wanted wear;
    Though as for that the passing there Had worn them really about the same,

    And both that morning equally lay
    In leaves no step had trodden black. Oh, I kept the first for another day! Yet knowing how way leads on to way, I doubted if I should ever come back.

    I shall be telling this with a sigh
    Somewhere ages and ages hence:
    Two roads diverged in a wood, and I— I took the one less traveled by,
    And that has made all the difference.

  40. juan

    So under what economic system would society find itself free from parasitical barnacles? Just curious…

    Fractional reserve banking=individualism?
    Was this your premise?
    No, my premise is simply as expressed, that a system, the capital system, which depends on free wage labor must, at least during/after the transition from dominance by merchant capital, emphasize the role of ‘the individual’ – even as, and because, this same system objectively socializes.

    In so doing, this system creates conditions for another in which we become conscious of being social creatures, of our social being, of our real dependence upon one another as human beings rather than things to be exploited.

    A system of ‘free and associated producers’ [which does not exist] can be understood as one in which ‘free’ = transcendence of the need for any central governing body, which is contingent upon our conscious association. Each depends on, helps develop, the other, that’s also then a process of becoming free in fact rather than according to ideology and a sheet of parchment.

    Whether such system will ever come to be, I don’t know but do know it would be much preferable to the track we seem to have been on for ~a century, progressively greater barbarism.

  41. William

    I’ve enjoyed this descent into the basement of political philosophy (though I admit to only understanding a fraction of it). But I’m scratching my head as to where this gets us? I’ve been a following this blog since Nov of 07 and it seems that the consensus is that the government has been “captured” since we now have more or less the same policies being pursued by two different political administrations. So if this is indeed a fact; then how does this discussion of government is the problem or government is the solution get sorted out when government by our two political parties within a two party system is for all practical purposes identical?

    I’m just a retired soldier. No formal education in economics, political science, or philosophy. But it seems that Bernanke’s remarks to a graduating class are being given too much heft and analysis. What else is this guy going to say when his organization is arguably at the origin of this crisis?

    It may have been more appropriate to have done a satire or farcical expose of this event. Perhaps it would have served the purpose of showing us the absurdity of his position and remarks all the more.

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