Bill Bonner on the crowd and the Big Lie

Crowds need lies, not truths; they are incapable of living with the infinite complexity, paradoxes, nuances, and gray areas of the truth.  Mobs belittle the truth to the point that it no longer resembles itself.

From the truth that stocks can rise for long periods of time came the lie that they will always do so.

From the truth that consumer spending can boost an economy became the lie that consumer spending is all an economy needs.

From the truth that consumer credit can boost consumer spending became the lie that credit can replace actual savings.

From the truth that the Fed can manipulate the economy in the short run became the truth that the Fed could control it over the long run.

From the truth that foreigners are generally willing to accept U.S. dollars in exchange for valuable goods and services came the lie that they must always do so.

And from the observation that the American economy - with its emphasis on debt, consumer spending, and stock market investing by the lumeninvestoriat - was a great success in the 1990s, came the fantasy that it represented the end of history.

Taken together, blended and simplified, these notions came to produce a sentiment that was completely at odds with the wisdom of previous generations and contrary to economic reality.

~ Bill Bonner, Financial Reckoning Day (2003), pp. 240-241