Fantasyland - Chapter 22, webpage 4, continued
The Economic Dreamtime
Entrepreneurialism that produces useful, innovative new products and processes is one thing. Bravo to Jobs and these entrepreneurs. But the free-market fundamentalism that became our governing paradigm starting in the 1980s had unfortunate consequences when it extended into wholesale wishfulness and denial of reality. Near the end of a speech he delivered at a conservative think tank around Christmastime in 1996, during the long boom, our libertarian chairman of the Federal Reserve, Alan Greenspan, wondered, "How do we know when irrational exuberance has unduly escalated asset values?" Irrational exuberance: Greenspan is in essence saying the Nation’s neuroreality was far from actual reality. In other words, were we in danger of slipping off the reality tether, becoming so financially delirious we were heedless of our delirium? Yes, as it turned out.
The dot.com bubble was a historic economic bubble and period of excessive speculation that occurred roughly from 1997 to 2001, a period of extreme growth in the usage and adaptation of the Internet by businesses and consumers. During this period, many Internet-based companies, commonly referred to as dot-coms, were founded, many of which failed. During 2000–2002, the bubble collapsed. This was the popping of the dot.com neuroreality bubble.
Regarding the mortgage crisis and real estate bubble of 2008, three years after stepping down as chairman of the Federal Reserve, on October 22, 2008, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform. A long-time leader of deregulation, Greenspan admitted to a congressional committee yesterday that he had been "partially wrong" in his hands-off approach towards the banking industry. "I have found a flaw," said Greenspan, referring to his economic philosophy. "I don't know how significant or permanent it is. But I have been very distressed by that fact." He said: "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan. Greenspan admitted his previous neuroreality was incorrect. It takes great depth of character to do such.
The bubbles in technology stocks and real estate were classic American phenomena. We'd been there before - with the Virginia gold hunters in the 1600s, overbuilt railroads in the 1800s, rocketing Florida real estate prices in the early 1920s, and the value of U.S. stocks tripling in four years in the late 1920s. As the prime interest rate fell from 20 percent in 1981 to 4 percent in 2004, however, credit had never been so easy for so many Americans. The irrational exuberance, the national fantasy of good times rolling forever, had never lasted longer or been shared more widely. The Great Depression had chastened people in the 1930s, but that was then - by the 2000s, everyone who'd lived through it was elderly or dead. We were ready and hungry to believe in financial and economic fantasies again.
In less than a decade around 2000, the value of the average home almost doubled. Many, many middle-class Americans suddenly felt rich. The country seemed to be on some incredible Vegas winning streak or at a multigenerational rave that went on and on. (Actual raves, no coincidence, also emerged in the 1980s and 1990s.) We decided that Mardi Gras and Christmas are so much fun, we should make them year-round ways of life. Maybe some people knew deep down it couldn't last forever, just as some people found the incredible performances of Barry Bonds and Roger Clemens . . . incredible. But no one wanted to be a buzzkill. The fantasies were more fun, and in the financial domain self-fulfilling.
To the technology and real estate and financial businesses, the years on either side of 2000 were like what the years on either side of 1970 were to the rest of American life: the prudent old rules no longer applied, anything seemed possible. But then the dot.com and real estate bubbles burst - truth and reality struck. Will reality strike the stock market again, presently (1.14.17) at 25,800. The market knows only reality and truth.
In Silicon Valley, a few clever and lucky people occasionally found a pot of gold, which encouraged everyone else to keep believing and wishing. The
odds of any individual entrepreneur becoming a megawinner are vanishingly small, as they are for buyers of lottery tickets, and the jackpots in tech are capricious. The first generation of digital entrepreneurs to get amazingly rich in the 1980s and '90s - Gates, Jobs, Bezos - became billionaires in early middle age. In this century before and after burst bubbles and meltdowns it happened to younger, digital billionaires at thirty (Larrry page of Google) or twenty five (Evan Spiegel of Snapchat) or twenty-three (Mark Zuckerberg of Facebook) Which serves only to make the dream all the dreamier. What's the new term of art for the most financially successful tech start-ups? Unicorns, after the magical creatures in which only children believe.
It's correct to say that the financial meltdown of 2008 resulted from too much deregulation, too many arcane Wall Street innovations, and some fraud. But that's just one way of explaining it, the one that comfortingly focuses all the blame on government and a small class of the rich and powerful and deceitful. The deeper causes were more widespread and unconscious, the fantastical wishfulness affecting at least a large minority of Americans, maybe a majority.
One undeniable virtue of markets is that eventually they reflect hard facts. The financial world isn't prone lo permanent fantasy. During the 1990s and the early 2000s, however, Wall Street "honed the art of creating and selling financial products with an increasingly tenuous connection to reality. Nick Paumgarten wrote in The New Yorker right after the 2008 crash, “It was more like what anthropologists and psychologists call magical thinking, magical neuroreality - the tendency to believe that wishing it so makes it so". Americans clung to the conviction that you can have outsize return with little risk, leverage without recoil. This is what the clever financiers claimed that their inventions could do. Their colleagues and clients
wanted to believe them. They all wanted to believe that their credit-default swaps could continue to insure against debt defaults. . . .
Magical thinking enables you to see good where there may be only bad.
The financiers were a mixture of Cynics and Believers. When their faith in the financial magic ended in 2008, they promptly chucked those wishful beliefs, of course, and defaulted to pure, reality-based Cynicism.
What ended that period of extreme financial make-believe? It wasn't grown-ups in charge stepping up and announcing it was crazy and doomed, that enough was enough. Rather, we finally ran through the supply of greater fools willing to pay a premium for the houses and other things the last group of fools had just bought. When America and the rest of the world were spanked by reality’s invisible hand, we got the meltdown and crash and Great Recession, the inevitable results of Fantasyland economics. The Truth hurts.
In 2009, I sincerely argued that our national near-death experience, in which we glimpsed the economic abyss, could sober us up and put us back on the realitv-based stralghter and narrower - a national reset! It was pretty to think so. Our voracious national craving for fantasy, however, when denied in one area, quickly finds other places to satisfy itself.
As Fantasyland Goes, So Goes the Nation
Consider the experience of one prominent republican congressman from California's Central Valley. When he arrived in 2003, at twenty-nine, he was among the most conservative elected officials in Washington. The right-wing Heritage Foundation now ranks him in the most "liberal" third of House Republicans. "l used to spend 90 percent of my constituent response time on people who call, e-mail, or send a letter" about some real issue, he told The New Yorker. His typical constituent back in the 2000s had an opinion about "actual legislation. Ten percent were about ‘Chemtrails from airplanes are poisoning me’ to every other conspiracy theory that's out there. And that has essentially flipped on its head," he said, during the last dozen years or so. Now only a small fraction of the messages from constituents are "based on something that is mostly true. It's dramatically changed politics and politicians, and what they're doing." That’s quite a change in neuroreality. The congressman who sounded so sensible in 2015 was Devin Nunes, who chairs the House Intelligence Committee. By 2017, he was a stalwart defender of a president whose specialty is passing along untrue conspiracy theories, such as the one about having been wiretapped in Trump Tower.
During the two decades leading up to the financial and economic crash of 2008, the Right and Far Right built out an unprecedented new multimedia infrastructure. There are now ten times as many talk radio stations as there were in the 1980s. Of the several shows with the largest audiences, all but one are about politics and government by and for right-wingers, with a combined daily audience of forty-five million. (The other show provides "biblically based" financial advice aimed at evangelicals, and directly behind those is Coast to Coast AM, the nightly conspiracy-and-magic-and-falsehood clearinghouse.)
Skepticism of the press and of academic experts has been a paramount fetish on the right for years, which effectively trained two generations of Americans to disbelieve facts at odds with their opinions. "For years, as a conservative radio talk show host," Charlie Sykes wrote in early 2017, "l played a role in that conditioning by hammering the mainstream media for its bias and double standards. But the price turned out to be far higher than I imagined. The cumulative effect of the attacks was to . . . destroy much of the right's immunity to false information." The conservative talk-radio host John Ziegler made a similar confession in 2016: "We’ve effectively brainwashed the core of our audience. And now it's gone too far. Because the gatekeepers have lost all credibility in the minds of consumers, I don't see how you reverse it." What has happened to our neurorealities? Have they become virtual realities?
During the first fifteen years of the twenty-first century, the GOP turned into the Fantasy Party, with a beleaguered reality-based wing. A Far-Right counterculture empowered millions of followers and took over the American Right, as their extremist predecessors succeeded in doing to evangelicalism and the gun lobby three decades earlier.
This book had been under way for a couple of years when the 2016 presidential campaign began. The fact that Fantasyland candidates were the consistent front-runners for the Republican nomination (Donald Trump and Ben
Carson at first, then Trump and Ted Cruz) was surprising and appalling but also, I have to admit, a little gratifying to me - empirical proof of my theory as it applies to politics. The day after the Republicans' second primary debate in 2015, at the Reagan Library, before the debates became completely cartoonish, a shocked New York Times editorial called it:
a collection of assertions so untrue, so bizarre, that they form a vision as surreal as the Ronald Reagan jet looming behind the candidates' lecterns.
It felt at times as if the speakers were no longer living in a fact-based world where actions have consequences, programs take money and money has to come from somewhere. Where basic laws - like physics and the Constitution - constrain wishes. Where Congress and the public, allies and enemies, markets and militaries don't just do what you want them to, just because you say they will.
I read that and said out loud, "Welcome to Fantasyland." After his election, another Times editorial granted that “Trump understood at least one thing better than almost everybody," that the "breakdown of a shared public reality built upon widely accepted facts represented not a hazard, but an opportunity."
I started paying close attention to Donald Trump a long time ago. ln Spy magazine, which I cofounded in 1986 and edited until 1993, we devoted many hundreds of hours to reporting and researching and writing three cover stories and countless other articles about him, dozens of pages exposing and satirizing his lies, brutishness, egomania, and absurdity. Now everybody knows what we knew then. In the pretwitter age, whenever he sent threatening letters and called us names in public - "It's a piece of garbage," he said of the magazine - it was amazing, trippy, as if Daffy Duck or Roger Rabbit had turned from the onscreen cartoon universe and replied. It was kind of providential that he came along just as we were creating a magazine to chronicle America's rich and powerful jerks. And I guess it's sort of providence redux that Trump became the center of all attention as I was in the middle of writing a history of America jumping the shark.
Donald Trump is a pure Fantasyland being with his fantasyland neuroreality, its apotheosis. If he hadn't run for president, I might not have mentioned him at all. But here he is, a stupendous Exhibit A. To describe him is practically to summarize this book.
He's driven by resentment of the Establishment. He doesn't like experts because they interfere with his right as an American to believe or pretend
that fictions are facts, to feel the truth. He sees conspiracies everywhere. He exploits the myths of white racial victimhood. His case of Kids R US Syndrorne - spoiled, impulsive, moody a seventy year old brat – is extreme.
And he is first and last a creature of the fantasy-industrial complex "He ls P.T Barnum," his sister, a federal judge, said to his biographer Tim O’Brien in 2005. Even as a teenager in the early 1960s, Trump himself told O’Brien, he understood that any racket in America could be turned into an entertainment racket. “I said, 'You know what I’ll do? I am going to go into real estate. and I am going to put show business into real estate. I'll have the best of both worlds.’” Back then, in 1961, the historian Daniel Boorstein already saw what was coming in politics, what would make Trump president. "Our national politics has become a competition for images or between images, rather than between ideals," because we live in a "world where fantasy is more real than reality," Boorstein wrote. "Strictly speaking, there is no way to unmask an image. An image, like any other pseudo-event, becomes all the more interesting with our every effort to debunk it."
Although the fantasy-industrial complex had been annexing presidential politics for more than half a century when candidate Trump came along, his campaign and presidency are its ultimate expression, like nothing we'd witnessed in real life or imagined we ever would. From 1967 through 2011, California was governed by former movie stars more than a third of the time, and one of them became president of the United States. But Trump’s need for any and all public attention always seemed to me more ravenous and insatiable than any other public figure's ever, similar to an addict's for drugs. Unlike Reagan or Schwarzenegger (but like Barnum, who also entered politics in middle age, between the two halves of his show business career), Trump was as much or more of an impresario as a performer, and not just in his real estate hucksterism and his deals with the WWE. Before the full emergence of Fantasyland, Trump's various enterprises would have seemed an embarrassing, ridiculous, incoherent jumble for a businessman, let alone a serious candidate for president. What connects a Muslim-mausoleum-themed casino in New Jersey to a short-lived sham professional football league to an autobiography he didn't write to hotels and buildings he didn't build to a mail-order meat business to a beauty pageant to an airline that lasted three years to a sham "university" to repeatedly welshing on giant loans to selling deodorant and mattresses and a vodka and toilet waters called Empire and Success to a board game named after himself to a TV show about pretending to fire people?
What connects them all, of course, is the new, total American embrace
of admixtures of the fictional and real and of fame for fames sake, Trump's reality was a reality show before that genre or term existed. His home in Palm Beach, a Mediterranean-fantasy castle built at the height of the first Florida real estate bubble, is also a private club that costs $200,000 to join. “It’s like going to Disneyland and knowing Mickey Mouse will be there all day long,” says one of the members, a local billionaire. Trump has always played the character Donald Trump, the way William Cody played the character Buffalo Bill, but more so, because now there is no offstage.
When he entered political show business, after threatening to do so for most of his adult life, his portrayal of that character was an unprecedented performance - presidential candidate as insult comic with a ridiculous artificial tan. And the hair - colored gold like a clown’s in a farce, shamelessly unreal and whipped into shape as if by a patissier. Successful presidents and candidates have had to be entertainers for a while, but Trump went all the way. He used the pieces of the fantasy-industrial complex as nobody had before. He hired actors to play, enthusiastic supporters at the kickoff of his candidacy, and unlike the other candidates, he was an exciting star, so TV shows wanted him on the air as much as possible - as people who worked on those shows told me, they were expected to be careful not to make the candidate so unhappy he might not return.
As he began his campaign, a nine-year-old in Iowa he’d brought aboard his helicopter asked, “are you Batman?" And Trump replied: "l am Batman." Before any votes were cast, he bragged compulsively about his polling numbers, not even ratings, like on TV, but hypothetical votes, virtual votes. The campaign turned from a Batman subplot to a new postmodern genre that broke the fourth wall. Like no candidate ever before, Trump riffed in campaign speeches about the campaign, about his performances and box office. When a longtime PR man for tyrants took over, he followed suit, commenting on the Trump character and script and show as part of the show. “When he’s on the stage," Paul Manafort said, "he's projecting an image that's for that purpose. The part that he's been playing is evolving into the part that now you’ve been expecting but he wasn't ready for, because he had first to complete the first phase.'' Act one had finished, he said, and during act two. "the image is going to change." It did not then and has not since. "We're in more of a WWE brawl stage as a nation right now," Ben Carson explained. "This is the ultimate reality show”, Manafort said before the national convention, a show where the prize would be "the presidency of the United States." Then, as on a reality show, Manafort was abruptly asked to leave the tribal council area, chopped, fired.
First the Internet enabled and empowered full Fantasyland. Then it did so for candidate Trump in 2015 and 2016, feeding him pseudonews on his phone and letting him feed those untruths directly to followers on social media. He is the poster boy for the downside of our digital world. "Forget the press," he advised people as a candidate - just "read the Internet." After he wrongly declared during the campaign that a certain anti-Trump protester "has ties to ISIS," he was asked if he regretted tweeting that falsehood. "What do I know about it?" he replied. “AIl I know is what's on the Internet." That statement says a lot.
But then he decided the Internet is a doubled-edged sword. On the one hand, it allows him to find and circulate conspiracy theories easily. "It gives a forum for people to express their ideas," a senior minion explained, so "when he sees an idea that he thinks is worthy of having a discussion about," he can immediately tweet it. On the other hand, Trump read on the Internet (Breitbart, lnfowars) that his elite enemies operating the Internet (Google) conspired to spread lies to hurt him. "Google's search engine," he announced at a rally just before the election, was "suppressing the bad news about Hillary Clinton. How about that?"
Fantastical conspiracy theories, a recurring Trump motif, have also been a recurring motif in the history of Fantasyland – the supposed schemes of
witches and Catholics and Masons and Jews, now of Muslims and liberals and internationalists. Trump launched his political career by embracing brand-new conspiracy theory twisted around two other deep American taproots - fear and loathing of foreigners and nonwhites. In 2011 Trump became chief spokesperson for the fantasy that President Barack Obama was born in Kenya, a fringe idea that he brought into the mainstream – he wasn’t a nut, he was Donald Trump! - so that it could be regularly promoted on Fox News and by an anchor on CNN. A dozen House Republicans cosponsored a federal bill that would require presidential candidates to submit a birth certificate and other proof that he or she isn't a secret foreigner; similar bills were introduced in state legislatures. After the Hawaiian bureaucrat who released a copy of the president's birth certificate died ln a private plane clash Trump tweeted: "How amazing. . . . All others lived" - suggesting the official had been murdered by the Obama conspiracy. Finally in the fall of 2016, he grudgingly admitted the president was indeed a natlve-born American - at the same moment that an Econontist/YouGov survey found a majority of Republicans still believed Obama probably or definitely was born in Kenya. That's a false neuroreality.
A conspiracy of scientists, journalists, and governments perpetrated the false idea of climate change, Trump has said for years. "Global warming has been proven to be a canard repeatedly over and over again," he declared, "mythical," "nonexistent," ''bullshit" "based on faulty science," "a total, and very expensive, hoax!" So much for science, fact and truth. He tweeted, "The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive.” On that last one, he later claimed he'd been kidding.
Conspiracies, conspiracies, still more conspiracies. "Scalia," the rightwing host of the Savage Nation asked him on the radio in 2016, "was he murdered . . . ?" Well, Trump replied, "they say they say they found a pillow on his face, which is a pretty unusual place to find a pillow." In fact, the pillow was found on the mattress, not on Scalia. On Fox and Friends he discussed, as if it were fact, the National Enquirer's suggestion that Tec Cruz's father was connected to JFK's assassination, "What was he doing with Lee Harvey Oswald shortly, before the death, before the shooting? It's horrible." The Fox News anchors interviewing him neither challenged nor followed up. He relived the 1993 fantasy' about the Clintons' friend Vincent Foster - his death, Trump said, was “very fishy” because Foster "had intimate
knowledge of what was going on. He knew everything that was going on, and then all of a sudden he committed suicide. . . . I will say there are people who continue to bring it up because they think it was absolutely a murder." He has also promised he's going to make sure “you will find out who really knocked down the World Trade Center." What do you think of Trump’s neuroreality? But it has all worked for him, because a critical mass of Americans is eager to believe almost any conspiracy theory, no matter how implausible, as long as it jibes with their opinions and feelings.
Not all lies are fantasies, and not all fantasies are lies; people who believe untrue things can pass lie detector tests. Trump's version of unreality is a patchwork of knowing falsehoods and sincerely believed fantasies, which is more troubling than if he were just a liar. His insistence that he didn't grab or kiss any of the dozen women who in 2016 said he had, unbidden - "Nothing ever happened. Didn't exist. This was all fantasyland” - is a lie, I'm close to certain. But he probably really believed that "the murder rate in our country is the highest it's been in forty-seven years,” the total and dangerous falsehood he told leaders of the National Sheriffs Association in the Oval Office. Whatever he believes or doesn't, he makes untrue assertions more frequently than any U.S. leader in recorded history. The fact-checking organization PolitiFact looked at four hundred of his factual statements as a candidate and as president and found that 50 percent were completely false and another 20 percent mostly false. After he became president, according to The Washington Post, he issued an average of more than four falsehoods or "misleading claims" per day.
The New York Times compared the number of lies Trump told in his first hundred days in office compared to Obama in his eight years as President: