Intro to Free Trade & Free Markets Part 1

America is going bankrupt…not technically, but functionally, which is just as bad. (See here, here, here, and here.) And one of the causes is Free Trade, or what passes for Free Trade…what is actually Faux Free Trade.

(Want to read more? Try this, this, and this.)

So, there it is…Free Trade, one of the hottest topics going around. (Well, it was until the race turned into Hillary's attacks on Trump's "misogyny" while deflecting her problem with her email.)

OK, no…it   died rather quickly. I guarantee you it died because the elites wanted it to die. They are the ones who profit the most from this fake or Faux Free Trade… Read about Corporatism vs Capitalism in The Matrix Exposed.

Free Trade is an article of faith in our business class, and anyone who tries to touch their version of free trade is some kind of demonic populist bent on destroying American business and international trade as well. (Great example with Trump as target.)

Free Trade, even (unbelievably!) the terrible Faux Free version we have, has been incorrectly assumed to be some kind of panacea for the world's economic problems, and it's also incorrectly assumed that what we have going now with nations such as Japan, South Korea, and especially China, is "free trade".  We will get to that.

Beyond that, the "free traders" believe that the founder of modern economic theory, Adam Smith, was a "free trader". The Authentic Adam Smith says differently….(page 7)…

"A close reading of The Wealth of Nations and other good evidence
shows that Adam Smith was no doctrinaire free trader. 

 He approves certain monopolies and restraints on trade, export subsidies and restrictions, sumptuary laws, penal taxation, limits on the rate of interest and the issue of bank notes, compulsory qualifications for craftsmen, the pressing of merchant sailors and discrimination against Roman Catholics. 

 He was expert at exploiting the system of nepotism then dominant in the administrations of Britain, India and North America. 

He believed that government should be involved not only in educating but in entertaining the public. The words laisser faire or laissez faire appear nowhere in his work. Though he deplored British commercial policy in Ireland, the Americas and India, he thought the solution was
not independence for those countries, but federation with the mother country."

What I'm going to do in these blogs is try to give some basic but thorough economic lessons to people who might feel that these concepts are too challenging and abstract for them. I wish to make it possible for you to counter those arguments and have a sense of what you want as a citizen with a stake in the future of our country.

I maintain that what many of us have intuitively felt…that so-called "free trade" is neither "free" nor "fair"… have had it right all along. (Has the US turned against Free Trade?)

Further, the only reason these concepts are too challenging and too abstract is because the experts prefer it that way. You can study various societies and you will find even in primitive tribes that there is an elite in the tribe that has control of, let's say, medicine or the healing arts.

Even under these extremely primitive conditions, anthropologists have noted that the medicine men construct an arcane vocabulary and set of concepts to keep their knowledge essentially to the in-group.

So, when you go on-line and you look up these concepts, as I've done recently, you'll come away confused and befuddled.

Worse, the experts get things very, very wrong.

Remember the crash in 2008? Peter Schiff was laughed at on the Neil Cavuto show on Fox Business because he said that the stock market was going to crash. He was not alone in this prediction, and some people made hundreds of millions of dollars going against the conventional wisdom concerning the mortgage industry and United States.

In 1989 everyone saw Japan as about to rise to be the number one economic power in the world. They had all of the top 10 banks in the world. Within one year the Japanese economy crashed, and it has never really recovered. Four of the banks died. No Japanese bank remained among the top 10.

Yet, when I studied it, I was teaching ESL in Milan Italy. Discussing it with bankers and others, anyone could see there was no big mystery behind the collapse. The bubbles were easily predicted and you could account for everything that happened. (We will get to that in re Export-driven Econ Model.)

What you can't account for is the fact that everybody missed the analysis, the obvious prediction, the signs of danger, and let it go on until everything burst.

So not only do they keep this information and knowledge to themselves, they misuse it to make a ton of money, (often- too often- even way too often), at the expense of not only the American people but of the foundations of our society and nation-state.

Part 2 

Americanization and Individuation Seen Through Godfather I & II

Francis Ford Coppola's film, "The Godfather", provides a great opportunity to examine the relationship between Americanization and individuation.

Essentially Michael is on his way to Americanization and would have had the possibility of a real individuation had he avoided assuming the role of his father as godfather.

The film begins with the Corleone family wedding. Kay is there as the girlfriend-fiancé of Michael Corleone. She's actually pulled into the family portrait at the wedding, harbinger of her future relationship both with Michael Corleone and the family.

Michael Corleone makes a big deal to Kay of not being the man his father was. He tells the story of a young Italian-American singer who could not escape from a bad contract with a bandleader. He introduces the phrase "make an offer you can't refuse" to describe the way that, when the Godfather was unsuccessful the first day in getting his godson released from the contract, his father went back with Luca Brazzi, and told the bandleader that "either your brains or your signature is going to be on that contract"- and got the singer released.

N.B.: Many think it's a story about Frank Sinatra. Based on a similar incident, but, actually, Frank Sinatra got out of his contract with the help of a musician union leader. Sinatra's story was plagiarized and re-written, as it were, but too many have assumed it was the truth.

Michael had made that first break with the family line. By having an American fiancé in the aftermath of having fought as a hero in World War II, in spite of the fact that his father had pulled strings to get him out of having to go to war, something his brother Sonny objects to strongly in a scene that you see the end of the movie, you really see the portrait of an Americanized Michael on his way to escaping tradition, a Michael who would not have been owned by tradition...

He gets sucked into the role of the Godfather through the emotional attachment to his father during the duress of the aftermath of the attempted assassination, and all of that "Americanization" and potential individuation is put aside.

The beginning of the shift is well symbolized by Michael Corleone in a telephone booth with Kay Adams shut out, on the outside, feeling helpless as he calls home to find out if his father is still alive, having seen the newspaper headline about the assassination attempt on his father.

Without real ambition, but merely as an extension of things he felt and closely held, i.e. the love of family, he becomes a potential heir to his father. While sitting in what is essentially a throne, as the camera focuses in on him, he proposes the assassination of Solozzo and his police captain bodyguard., which he then carries out with his brother's and Mafia captains' blessings.

Escaping to Sicily, Michael Corleone renounces, in essence, his engagement to Kay Adams and marries a young Sicilian woman.

At this point, you'd have to say that Michael Corleone had reconstituted the energy of his family line, what is called in 19th century racial theory, the "Kultur", of the Sicilian Mafia family.

Michael Corleone's new Sicilian wife is killed, in a car-bombing, and he returns to America and eventually goes back with Kay Adams who still loves him.

While promising to escape his role as the Godfather, subsequent events, his own emotional life, his own lack of insight as to what his father really was, keep him in that role far longer and therefore in a more damaging way than he ever could have imagined.

At the end of the Godfather II, he has a telling conversation with his mother, played by Morgana King, where he expresses fear of losing his family in Italian. (Really a conversation with his Unconscious, with a great collective mother-figure, a kind of seeress, at that moment, which is why the conversation is in Italian, something that evokes a sense of being outside of parochial time)...

She assures him that he cannot lose his family. If that were only the truth....

As the truth about his role as the Godfather comes out near the end of Godfather II, Kay Adams realizes what kind of man she's been married to, the degree of the promises not kept, that he is truly the very man that Michael's sister condemned with harsh words for the murder of her husband and others at the end of Godfather I. 

Ah, yes…the great scene where Michael Corleone lies to Kay, giving her the opportunity to just ask one question "just this once" regarding his business. He assures her that he had nothing to do with the death of his brother-in-law, a complete lie. She beams back at him, totally content.

But, with all of the information that Kay now has, she leaves him, and Michael Corleone ends up all alone, his soul shattered and betrayed, without his wife, the American, even without his own brother that he had had killed.

Kay represents that loss of soul, the loss of relationship to conscience and real values, the kind he was on the verge of adopting as he broke away from his family in an act of rebellion, signing up for the US military to fight in World War II.

In fact, Michael Corleone had used Kay Adams for comfort, to assuage his conscience, and exploited her as he has exploited the American way of life. Yes, Michael cared for her, but entirely on his own terms. Returning from Sicily, he's essentially an emissary of death, surrounded in his dark cave with the plutocrats of the underworld. She doesn't see this...he doesn't see it, either.

The art direction in this masterpiece of cinema is full of indications, a message system in itself as to what is really going on.

I am not sure to what extent Coppola did all of this consciously. Would be a great interview....

Individuation is never that easy. That is, becoming a true individual is counter to nature, evolution that goes upstream, wrenching from inside you every bit of available energy and then some. You are taken up, possessed, with a total examination of what you're actually about, what your values are and why you do things.

That is the self-overcoming of Nietzsche. 

The thing that Michael Corleone couldn't do was see that the man who loved him and that he loved dearly was essentially evil outside of the family. Because the evil happened outside of the family, they couldn't see it and they couldn't feel it and this permitted him to move into the role that he should've avoided as if it were the plague, a plague of the soul.

More on this to come.

How Ancient Greece Drove Out the Feminine

This brief blog is dedicated to Melissa ( @MelissaJaneSays ) who has raised really good points about the war on the feminine conducted by Christianity and the West and by the Catholic Church, in particular.

What I'm trying to do here is create perspective on the process of how the masculine has overridden the feminine by going back in time before the Catholic Church existed so as to demonstrate that the tendency is an existential tendency that's an unfortunate and apparently necessary part of our past, and not simply particular to the Catholic Church.

The first, the most archetypal, theft of the role of the feminine by the masculine occurred in ancient Greece when the cattle-driving men and women from Turkey invaded Greece, conquered it, and made slaves of the indigenous population.

According to some historians, and notably, Robert Graves, the ancient indigenous Greeks didn't understand that sex made babies, or, the women understood it, but they refused to share the knowledge with men. So the women were held in thrall by men who didn't understand that they were the co-creationists of children. The women had a kind of absolute power.

They were an agricultural population who worshiped Hera (name derive from Erith, Earth?), and other goddesses in local cults, the local version of Hera.

The rites of Hera involved the sacrifice of the queen's consort every spring, his entombment and his replacement/resurrection with a new consort for a year. The bodies of the men who were sacrificed were probably eaten by priestesses and their blood scattered on the fields where the nitrogen in the blood helped increase the production of food, validating the whole notion of what they were doing, ie returning sacred blood to be used again.

The sacrificed consorts became Hera's sons and were considered heroes, derived from her name.

A side note: as a boy I always wondered how Hercules could be the son of Zeus. It turns out that Hercules means "little one of Hera", and it's obvious here that the masculine took over what had been traditionally the power of the feminine by changing his parentage to Zeus, a further disrespect of the Feminine.

The cattle drivers knew that sex made babies because they could not possibly take care of a herd of cattle without coming to understand that sex and procreation were connected.

The conquest of the then "Hellenes", the indigenous people of Greece, who became the "Helots", the slaves that served the upper class, brought about a re-dimension of the power of the feminine.

The conquest itself, and the end of the myth of women as divine creatures who give birth to children by themselves without the assistance of men, ended women's essential monopoly on power, especially spiritual power.

Lest you think that this is a conjecture that's way out in left field, I will point out that in the early 1970s in a remote Chinese mountain area, the locals didn't know that sex made babies. Brother and sister raised the children of the female while both of them pursued what would we would consider a very freewheeling sexual lifestyle. This is the original clan model. All members of the clan, all the"kin", were descended from the first brother-sister pair directly from Mother.

In traditional culture, and in Jewish culture until recently, the child could only be a member of the clan if the mother was a member of the clan. This is because the body of the child was considered identical to the body of the mother. So, it seems to be a kind of universally-held notion.

As the men took over ancient Greece, they did not throw out the rites of the then dominant female society but rather took on the role of the priestesses- but with some odd twists.

The men dressed in the robes of the female, donning her breastplates, her wigs, and the double-sided ax, which was a symbol of the waxing and waning moon. The moon in a feminine culture is considered the more important deity in comparison with the sun. The moon is capable of blocking out the sun. Women's menstrual periods are so named because they go in synchrony with the moon, an obvious miracle, as it were.

Zeus, who had been a rather unimportant semi-divine creature previously, now became a major player. His followers, the priests of his rite, went around Greece making deals with all local sites of worship for control.

For Robert Graves, this is the original reason that Hera was "jealous". He means that Hera was jealous because the priestesses of Hera wanted control of all of Greece and its rites, whereas Zeus's followers took over each cult, making deals with the local goddess, with force, ie "rape of Europa".

This whole sacrifice of the prince consort every year was a kind of grand mimicry of nature, which I like to compare to the people on stage at "Rocky Horror Picture Show" who imitated everything that was on screen.

The earth, which is the energy of the Mother, (the Latin mater, which becomes matter), goes through a life cycle like a woman. In the spring the earth is like a child, which becomes like a full woman with the bloom of the trees (May as in "Maya" and June as in "Juno") and gradually goes "gray" as the leaves turn brown and then undergoes a kind of death.

However, everything that shot up out of the ground was considered a son of the mother, a kind of Mercury, a messenger from the earth goddess, a servant and protector. (Even Isaac Newton had such an idea.)

The sacrifice of the queen's prince consort represented the ancient Greeks' understanding of the relationship of the masculine and feminine.

The queen gets to live because she is reborn of herself, but the son of the mother is reborn in the spring out of Hera. The royal couple had to mimic that relationship. So the king was killed and entombed ("returned to womb/tomb") and the new prince walked out representing that renewed plant life of the spring.

Sounds like something re Christianity?

Yes, it certainly does. If the Christians got the myth of rebirth of Jesus from somewhere, that somewhere was everywhere in the Mediterranean where aspects of the original feminine culture lived on.

I'm not saying that I know whether Jesus rose from the dead or not. I'm just explaining some of the pagan origins of the attraction of the myth, whether the event was true or false.

Over time, the queens became more attached to their temporary consorts and looked for a way out of the sacrifice of the prince. Joseph Campbell has a wonderful passage in one of his books where the story is told of how the delay of the sacrifice of the prince worked out under the distraction of an excellent court story teller, so that he's allowed to live.

Accommodations came about over time. Example: they would depose the prince/king for a day, appoint what was called an "Interrex". He would be sacrificed and the old king would come out as the new king and everyone was happy.

The interrex might be a prisoner, and, then, eventually, animals were used. The story of Abraham and Isaac probably came out of a similar change in the view of human sacrifice.

Catholic priests to this day wear what is essentially a dress that goes all the way back to that event where the priests of Zeus took over the rites of Hera and dressed like her priestesses. I remember in kindergarten looking at the priests and wondering why they dressed in dresses and I remember the nuns talking about it.

Yes, it really does make an impression. Gee, that and how come we have a May procession in May and honor the Virgin Mary and all? Goes right back to Matriarchal times...and the beauty contest was the contest to crown someone the representative of the Divine Feminine.

So, this is a great example of how cultural shifts occur under trauma and stress and under a change in the psychological balance brought about by conquest and the knowledge that sex makes babies and that men are partly gods themselves, as are women.

(In another blog, I will look at how the Egyptians lost their feminine God for a God who masturbates the world into existence.)

It all shows that as the left-brain grew in dominance, everything in the rest of the psyche, outside the conscious ego, got assigned to an increasingly distrusted unconscious that could not be counted on to support the power structure of the leading families and of the men who led them.

A "new" feminine arose to help out: one of the undoubted reasons that Athena got created out of previous goddesses is because the upper-class elite women began to have a disposition which favored the elite men...and the needed a myth to accommodate the new goddess...Athena as the true daughter of her father, Zeus.

A quick explanation.

Zeus took an ancient Greek goddess called Metis and, for some reason or other, swallowed her. Robert Graves said that this represented the fact that her rites got subsumed under the priesthood of Zeus. However Metis is a goddess and she really didn't die after being swallowed by Zeus. She continued to be a voice that spoke to him from his belly, his solar plexus, and probably represents two things:

The first would be that the high priestesses of Metis continued to play a role that was important in advising the new priests of Zeus as to what was what in the community...

The second would be that as men shifted to a head-based culture based on command and words, the kind that the American Indian Hopis (?) talked about with Jung in his book, Memories, Dreams, Reflections, there still remained that need for what today is called "gut instinct".

In the solar plexus we have a connection to the lower half of the body which ends up representing the other half of the psyche outside of the conscious ego.

But, as a result of that union of a traditional Earth mother cult and the new patriarchal Zeus cult, a new kind of feminine was born from the head of Zeus. That new kind of feminine was Athena.

Nowadays Jungian psychologists call the women in corporate offices "Daughters of Athena".

Coco Chanel invented the entire look for the corporate woman. Instead of all that fluffy exaggerated feminine stuff of the past, Coco Chanel, abandoned by her father and raised as an orphan, took the military cloths, the uniforms of her lovers and reworked them into a suit she could wear. Voila! The Chanel suit was born.

So let's get it.

The feminine has been through all kinds of changes in all periods of history, mostly denigrated, but now about to undergo her own re-birth, I maintain, as the masculine overreach has gone on long enough and a re-balancing seems to be manifesting. (Another post.)

It must be pointed out that what has constituted the "new feminine" of today politically and culturally is just the old feminine of Athena, now demanding to be the actual leader, and embodied in the candidacy of an ex-First Lady, almost as if a Greek myth were being acted out in a play....

...hence the terms "collective unconscious"...and "archetypes"...

Plato, His Republic, Left-Brained Consciousness & the Modern World

10:02 AM Thursday July 28, 2016

Pondering the basis of elitism...

Here I am…looking at Plato's Republic…a summary at Wikipedia…thought flashes through me:

Real problem is the gradual taking over of the human psyche by the left-brain, the speech center, the attempt to further conscious control…

Emergence of what we call consciousness. This consciousness is dominated by the language center and is different than the consciousness created by the pictogram cultures that use hieroglyphics to send messages. Pictogram cultures, eg Chinese, use images rather than a phonetic-based writing system. That's why we read left-to-right, activating the Broca speech center in the left-brain, while they can go in either direction.  Pictograms activate the right-brain....and more on that later.

So pre-Socratic culture is the culture of people who can still find the center of the psyche outside of their ego. By the time Socrates comes along, the elite, who need to be in control and understand what they do, have become obsessed with delineating the meaning of various concepts such as justice, which has a basis in what is strongly felt, in our experience. So, our experience is at the basis of the concept...not pure ideation...and this is not to say that our experience is never distorted or merely subjective.

Socrates and Plato abandon the tragedies...all evil comes from an imperfection in understanding or conduct that is our human "error" ...a lack of good ("privatio boni")...not inherent in the system...because that would make God responsible for evil.

By the way, reading Plato, you might think that basically every dinner party in ancient Greece with the elite was a kind of ancient "Charlie Rose Show"....

What the people who are advocates of a certain type of consciousness want are definitions so that they can argue their case concerning their activities and programs in relationship to values. It represents the emergence of a lawyer-like attitude that we begin to be find almost everywhere in the West after the Renaissance and find nearly everywhere in the world today.

In a sense it is the left-brain "mind" taking over for the "gods"...those impulses from within that were considered to come from "on high"...through (in Latin), the "Rex" (king), whose name is the source of the word "reason"...the "rays" of light...or from a very feminine Pythia or female seer who told us what the "Mother" wanted...

This elevation of consciousness (in the word-driven version of it) is part of the mind-body split. It might explain why Apollo killed the lover of his sister.

Apollo killed the lover of his sister because the lover represented a threat to his ownership of the knowledge. Apollo protected the Pythia, the woman who was the oracle at Delphi in Greece.

By the way, the oracle was usually an uneducated shepherd girl...ah..yes..very little left-brain there to interfere with the process of going back into the unconscious through the right-brain, the real "interpretation expert", the "Eve"....more on that later. (Mostly a note for myself right now.)

Socrates and people like Socrates shift to the anti-tragic worldview because, as they become conscious, they begin to judge God by the same concept processes that they use to judge themselves. And with that, begins a long process of making God not responsible for the evil of the world. That continued for literally 1300 years until 17th-century philosophy and especially 19th-century philosophy question the existence of God or question the way he operates.

What's done to people through process of shaming is that a kind of Berlin wall is set up between the conscious mind and the unconscious mind. I like to compare it to the scene in the film "The Emerald Forest" where the Brazilian native people come to the edge of the rainforest and see construction of the dam going on. They call it "the edge of the world".

I say that the walling off of consciousness which began with the Socratic philosophers started to come to an end, a real end, in the 19th century with Nietzsche and Jung who began to distinguish that the unconscious is actually a vital and intelligent force that we are in some sense loathe to acknowledge.

Freud essentially deemed the unconscious mind as the unruly element of the psyche, the "Id". He never saw the conscious mind as the source of our capacity to be so unruly and neurotic, as it were.

So between the trauma and the fact that we are left only with this mapbook called the conscious mind, our culture  had to head in a certain direction which has led us to all of our problems that we have today.

Since the unconscious mind and all of its relationship to the collective unconscious is at once denied and cut off, then it follows that the leadership class is the only one with the capacity to understand what needs to be done. I am reminded of the scene in "Remains of the Day" in which the head of the estate puts his head servant certain through hell, embarrassing him concerning his capacity to participate in democracy, as if he had no mind.

Kilroy wasn't there in that scene, but Plato surely was....

Just had the flash that the head of the estate was essentially a fascist as well, albeit a kinder gentler one, and that's why he couldn't understand what he was looking at what he was looking at the Nazis.

But, the American (Christopher Reeve) did with his more pragmatic intelligence...

If the servants have incomplete minds, then they will interpret their instructions incorrectly and that can't be good. So, they must remain tabula rasa to the point of a virtual complete self-extinguishment. It's been the modus operandi of various great institutions from the Catholic Church to the Communist Party.

To be continued....

On Weisel: My Comment at Cory Robin's Blog

Roy Cameron July 4, 2016 at 12:51 pm | #

http://coreyrobin.com/2015/02/13/i-the-holocaust-am-your-god/#comment-119690

It’s all about staring into the face of the Medusa. Got the phrase from Dr Adriana Mazzarella, a Jungian psychiatrist who also happened to be Italian and Jewish. I helped her prepare her English for her seminars in the US for her book, Looking for Beatrice, a Jungian interpretation of Dante’s Divine Comedy…and, yes, she lived through WWII.

Medusa represents that horror of life that simply turns your entire will to life to stone…something inanimate. I think what is happening here concerning the Holocaust is just that: looking at the Holocaust destroys faith in human nature and in the God that is supposed to have designed us.

If you follow the idea of a Covenant with God quite literally, then you have to ask yourself what good it did to have the Covenant. If God’s means in the world are so terrible, you have to doubt either the existence of God or accept his means-and-ends POV as something apparently unjustified…calling into question every aspect of one’s faith.

Another point of central importance would be the Holocaust’s apparent singularity. Its singularity derives mostly from our capacity to document it. 6 million Ukrainians were killed off by the Bolsheviks without anywhere near the documentation level, given that Russia was essentially a Third-Wold backwater without a great industrial base, and, as a result, the “singularity” of the Holocaust derives from the fact that similar events barely exist in human consciousness.

I also add that, as the Khmer Rouge conducted their Holocaust, I wondered why the phrase “Never Again” did not spur the world into action to prevent such a crime against humanity. Instead, I felt relief that Vietnamese communists, our enemy, rode to the rescue, albeit late.

I also have to agree with anyone who thinks that Wiesel takes it way too far getting into the “sacralizing” and “mystification” of the event. The motives of those who do evil can be understood and fought against. As I said, this happens to anyone who "stares into the Medusa" too long.

Last, but not least: the range of the comments here and their tone..impressive.

China Is the Bomb! (Or is it just the firing pin..?)

The world is going to economic hell, a trans-national globalist hell, in a Made-in-China handbasket that anyone without the usual blinders on saw coming years ago as China successfully reproduced the Japanese export model...without any adjustments for the now plain-to-see after-party no-growth scenario getting played out in Japan....

China Trade And The Inevitability Of Systemic Reset

China has built out its infrastructure, one of the few areas where the US, Brazil, Australia and others could get in on China's growth as a market, furnishing raw materials.

That supplied us with a modicum of cash that did not offset, but took some of the sting out of our enormous trade deficit with China. Now that the infrastructure build-out has slowed down, the world price for iron ore, copper and other raw materials is down. Our deficit grows and our economy slows...

China's exports are down in turn as we import less. The US economy cannot seem to recover...GDP growth on the point of recession...even in the face of extremely low interest rates and OPEC's suicidally low oil price.

This means that the US economy and the world economy are both structurally unsound....too much production in China with artificially low prices from a fixed-currency regime whose government has subsidized all manner of industrial production for export...while the US lives on credit, "monetizing" its debt...

The problem is now so bad that the Obama regime has taken the unusual step to slap a 500% tariff on Chinese steel...a story not covered widely by the financial press.

China Furious afterUS Launches Trade War Nuke: 522% Duty Slapped on Steel Imports

China Trade I: Black Hole of World Faux Free Trade : Japan '89 & Macro Econ 101

In 1989, when I was living in Milan, Italy, I had the opportunity to learn a very big lesson about macroeconomics. It came about because of the systemic collapse of the Japanese economy, which, at that time, had the top 10 banks in the world.

Japan didn't just have the banks; it had an economy which was the envy of the world. Articles had begun to appear in magazines such as Newsweek and Business Week about how journalists wanted to relocate from Washington DC or New York to Tokyo because that's where the action was.

I was going through the process of registering for my job as an ESL teacher, and I had purchased a copy of the International Herald Tribune. It had an article about those banks. They were all Japanese; it was emblematic of the whole transformation of Japan from a country which had lost to the US in World War II to a country which now had an economy in many ways superior to the US and led it in socio-cultural parameters as well.

There is an awful lot of anti-Americanism throughout Europe, and, though I'm broad-minded and can understand a lot of it, there are those who simply wish to strike back at Americans to enjoy a moment of fleeting superiority. There was such a person working in the Milan employment bureau, and he had to go out of his way to notice the article tucked under my arm, and then make a comment about how the top banks were now Japanese - and not American. Of course, it irritated me, but, other than that, I gave it little regard.

The thing that really struck me, though, happened within a year; the Japanese economy imploded. Not only did the Japanese no longer have any of the top ten banks, four of those banks that had failed.

Because so many of my students in ESL were businessmen, and because of my own decades long interest in economics, self-taught, I read whatever I could about the Japanese crash and got to consult with Italian bankers on the whole thing.

Finally, all of it got condensed down to a couple of articles in Business Week that summarized the relevant information and explained what had happened. It was not that complicated to understand the reasons of just how the economic and financial structures had failed.

The real problem, the one I had trouble understanding, was how the Japanese and international financial community had failed to interpret the immediate and relevant economic data correctly.

In other words, there was no great secret or backdoor manipulation that was responsible for creating the crash. There was no really new or particularly novel aspect to the situation. What had created the crash was the failure to interpret their world, a moral and existential blindness, that was fueled by greed and over-optimism.

Essentially, Japan had huge trade surpluses. The trade surpluses with United States were the result of a certain degree of currency manipulation designed to keep Japanese companies in a position to compete with American companies. The surpluses were also the result of internal barriers in Japan which added to the cost of American goods due to the internal inefficiency of their distribution system, which insured even higher prices. Even Japanese goods distributed in Japan cost more than the same product in Los Angeles, which was why Japanese businessmen bought themselves Toshiba computers while they were there.

Japan "sterilized" its US dollars by printing up corresponding sums of Japanese Yen, which were then deposited in the bank, keeping the exchange rate essentially the same. This mountain of Yen had to find its way into the Japanese economy and ended up creating bubbles in the stock and real estate markets. When you combine this with a couple of bad moves by Japanese companies, their economy went into a deep recession. Nissan, one of the most successful automobile companies in the world bet wrong and ended up being owned by the French.

Nissan invested heavily, bent on continuing to improve its robotic assembly line, but the major investment did not provide the return anticipated. The drop in cost of production didn't provide the ROI as the drop in cost didn't result in a significant slice of the US auto market going their way. Renault, a French automobile company, ended up owning Nissan, a tremendous reversal of fortune, emblematic of the whole fall of Japan's econ juggernaut.

The stock market, the real estate market, and Nissan failed within months of each other. Oh! The Japanese mafia, known as Yakusa, was involved as well, making it just that much harder to call in loans...

Four of those great Japanese banks died, while the others lost their status, and the Japanese economy and still hasn't grown in more than 25 years.

So what's the lesson here?

The lesson here is that the financial press and the business community and the government agencies in charge of banking and other aspects of our economy are not capable of seeing past their own prejudices, the narrowness of their own perspective, to get at the truth when the truth is uncomfortable and goes against the grain of what might be deemed the conventional wisdom of the stock market and international banking system.

We saw this again in 2007 when Wall Street collapsed and major banks died, such as Lehman Brothers, and we went back to the same processes that got us there in the first place.

Now what does this have to do with China? Answer: everything...