We possess one of the most reliable early warning systems known to the human race: history. However, it’s only effective if we use it. Unfortunately, we’ve shown a long-standing propensity for ignoring it.

 

My father used to tell me, continuously, that history repeats itself. He was fanatical about it. My mother, on the other hand, always told me to “expect the unexpected; it always happens.”

 

It confused me. I always wondered about it. If both of these were true, how in the world did people expect to plan for anything effectively?

 

While there is overwhelming evidence that history does repeat itself, it does so only because we fail to pay attention and learn anything from a first occurrence.

 

This also tends to explain why the “unexpected” always seems to happen! Jumps right up and takes a huge chunk out of our national derriere, it does!

 

In 1954, John Kenneth Galbraith wrote a short book (around 357 pages) titled, The Great Crash: 1929. I’ll return to this in a few paragraphs. First, though, here’s an observation from some personal experience.

 

My grandmother died twenty-four years ago. She was ninety-seven years old and one of the wisest women I’ve ever known. While cleaning out a bedroom closet in her apartment, my mother—who, herself, died in 1995—found a medium sized cardboard box.

 

The box contained numerous small paper bags filled with money in five, ten, twenty, fifty, and one-hundred dollar bills. The final tally: sixty-one thousand dollars… that’s $61,000.00!

 

My mother was incredulous. She lacked the ability to reconcile any reason for such blatant “stupidity.”

 

As far as she was concerned, my grandmother should have tucked all that money safely in a bank, earning interest, instead of running the risk of losing it to some common burglar’s lucky find during a break-in.

 

I let her rant. My mother’s questions were usually rhetorical and “advice,” from her offspring, regardless of its sincerity, was not high on her list of needs, if you get my drift.

 

And, while I did have some insight into my grandmother’s behavior relative to the “closet” money, I also knew, instinctively, that the only omniscience that “mommy dearest” ever bought into was God’s. My attempts, however modest, never impressed her one bit!

 

Discovering all that money in a closet did not surprise me at all when I considered the fact that my grandmother was a 41-year-old single mother at the time the stock market crashed in 1929.

 

She had kicked my grandfather out of the house for good. He was a mean-spirited, physically abusive alcoholic, who went on periodic drinking binges, spending his weekly wages on booze.

 

While she had a small amount of savings at the time, the crash wiped it all out. She spent years scrubbing floors, cleaning toilets, and myriad other menial jobs just keeping food on her children’s table, a roof over their heads, and clothes on their backs.

 

She made it! Even though all but two—my mother and my aunt—died before she did, they all turned out to be successful people in their own rights. But, she never again trusted banks.

 

That stash of money was her history lesson well learned. It was her way of making sure that the “unexpected” didn’t happen. My mother missed the lesson… completely. Now, back to Dr. Galbraith’s book.

 

It was required reading for us undergrads of yesteryear. I still have my copy. Chapter III, “In Goldman, Sachs We Trust,” begins on page 43. It’s an incredible lead-in to chapter IV on page 66, “The Twilight of Illusion.”

 

These two chapters, alone, constitute a historical lesson plan and framework for the things we should never repeat.

 

The bankers, stockbrokers, and free market-backing politicians of the mid ‘20s mistook illusion for reality. Even as things began crumbling, they said that our economy was “fundamentally sound.” But, it wasn’t.

 

As chance would have it, the “unexpected” happened. It jumped right up and tried to rip our collective guts out, “In Goldman, Sachs We Trust” and “The Twilight of Illusion” not withstanding!

 

It’s happening again. Our national love affair with illusion, it seems, has grown ever stronger these past thirty-years or so.

 

As the current “melt down” began in earnest, a few contemporary, free market-backing political hopefuls claimed that our economy was “basically sound.”

 

In fact, the White House even refused to acknowledge the existence of a recession—depression if you make your living in the building or automotive trades.

 

Well, our economy wasn’t, still isn’t, and never will be “basically sound” until we all learn three things about financial life.

 

First, it’s impossible to borrow ourselves out of debt. Second, history repeats itself mainly because we ignore its warnings the first time around. And, last, most of those things we we call “unexpected happenings,” aren’t!

 

And, as was the case back in the ‘20s and ‘30s, to hear our present Treasury secretary tell it, along with the Titans of Wall Street and investment bankers, Mr. “Unexpected” is completely to blame.

 

It seems he pals around a lot with that annoying Mr. Murphy, of Murphy’s Law fame. Both of them just seem to show up… randomly… out of nowhere, especially as twilight sets on Illusion City, USA!

 

So, instead of learning from historical blunders, our elected representatives are spending billions of dollars—evolving quickly into trillions—in bailout money to fix things and stimulate consumer confidence.

 

Worse, these same folks have admitted that they’ve lost track of the bailout funds in terms of which entities have received help, as well as how much they received. Wonderful. Just freaking wonderful!

 

I know that in several behavioral circles, some of the experts see confusion as an initial step to knowledge. If they’re correct, our current crop of elected officials border on the threshold of sheer genius.

 

Joe Walther is a freelance writer and publisher of The True Facts. You may comment on his column by clicking here.