Timeless Wisdom: How To Be Happy In A Financial Crisis (Part 2)
Dennis Prager analyzes the 2008 financial crisis, noting that $1.144 quadrillion in derivatives existed by June 9, 2008, yet argues a Great Depression is unlikely due to the FDIC and superior policy tools. He contrasts this economic resilience with deep concern over state intrusion and moral decline, citing Mao-named restaurants and Columbia University protests as evidence of eroding Judeo-Christian values. Prager concludes that without active parental instruction on ethics, America faces an uncertain future, while also speculating on gendered brain differences and marital instability around age 29. [Automatically generated summary]
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Welcome to Timeless Wisdom with Dennis Prager.
Hear thousands of hours of Dennis' lectures, courses, and classic radio programs.
And to purchase Dennis Prager's rational Bibles, go to dennisprager.com.
On today's episode of Timeless Wisdom.
Whenever I speak about men and women, I offer this thought that if we could swap brains for a day, men with women and women with men, this is what would happen.
Women would take a man's brain and just go, I can't believe it.
Nothing is happening.
That's coming up on Timeless Wisdom with Dennis Prager.
And it starts right now.
All right.
I hope some of the ideas will have been helpful.
And now we have some microphones going around.
Pam, are you on board here?
And Richard, you're on board?
Okay, so you guys walk around and I'll just call on people.
So, okay, so you're going to walk around?
Okay, so we'll start with this gentleman over there.
By the way, the questions should be to anybody, me or them.
I won't be insulted if they're all to the experts.
So whatever you want to ask.
Am I on?
Am I on?
Yeah.
Okay.
Dennis, thank you very much for putting this on tonight for us.
I'm sure that all of us have gained a great deal from it.
Good, I hope so.
My question needs to be phrased.
Take about 15 seconds, and then I can ask the actual question of the group.
As of June 9th, 2008, the total notational value of the outstanding derivatives surpassed $1.144 quad trillion dollars, this being the shadow banking industry.
Two, as of the year 2000, we entered the chondrith winter, in which the previous three winters over the last 211 years in American economic history have lasted nine years, 21 years, and 19 years.
That the subprime mortgage disaster lasted approximately 22 months in 2007 and 2008, whereas the arm mortgage rate possible disaster waiting to happen will cover 31 months over the years of 2010, 2011, and 2012.
That all the unknown billions of toxic paper has got to be cleaned off of the balance sheets of the financial sector.
Along with these several and other non-stated financial complexities we face, do we envision, and bear in mind I am an optimist, not a pessimist, do we envision from going from a serious deep recession into a possible Big D depression?
Okay, you could have actually asked it with the last sentence alone, but it was a fine buildup.
Actually, in all seriousness, that was one of the questions I had on my list.
Are we headed to the Big D?
Anybody want to answer?
I would say no.
This is not the Great Depression for a number of reasons.
Number one, there was no FDIC back in the 30s.
2,000-plus banks failed.
Every time a bank failed, every depositor lost every penny.
Every shareholder lost every penny.
We have a backstop.
There was something called a run on banks because people knew there was no backstop.
So that was a downward spiral that took us there.
During the Great Depression, they were actually raising rates into the stock market rally in 1932 when everybody thought things were going to be okay.
I hope that Ben Bernanke has done his research, and I think he has.
One thing that makes me feel good about the situation, not necessarily the administration, not necessarily the Treasury Secretary, but I actually think Ben Bernanke is doing the right things with the tools that he has.
And the tools now are much more powerful.
Everybody went off the gold standard in 1932-33.
It completely ruined the economy.
Everybody was devaluing their currencies.
So I think the policy response, although not perfect, it could have been a lot better, is much better than what happened back in the 30s.
So no, I don't think there's going to be a depression.
Anybody else, or should we go for another question?
Okay.
So let's alternate parts of the room.
Pam, back there, somebody's.
Okay.
All right, Richard.
Is that Richard?
I can't even see.
No, it's not Richard.
Okay.
Hi.
Hi.
The issue of optimism came up and whether we should be optimistic.
And Mark, you said that we should be optimistic.
In the normal scheme of things in history, as we looked at the trends, there are things that go up and they're up and down times and things are resilient in the United States.
But I wonder whether or not this time around it should be different and should give us pause, primarily for political reasons, because for the first time we have a leftist government.
And I wonder whether or not that leftist government, that political factor, will affect everything.
And unlike Jimmy Carter, by the way, Jimmy Carter didn't inherit the problem.
Here we have, for the first time, a leftist government that inherited a problem and now could take us in a downward spiral or even worse.
Yeah, let me give it a shot and then anybody here who wants to as well.
I happen to agree with you and I don't want to look, everything I said now will really play a role.
I am worried about the country precisely because of the direction that it is being taken.
Once you create in a society a sense of entitlement and a vast sector that is employed by the state, you can't go back.
We don't have ⁇ let's put it this way ⁇ maybe you can.
We have no example of going back.
People get used to what they get and people get used to working for the state and not having to produce as they would for a private company.
And the secure people, most people, the human nature wants security over adventure, security over autonomy.
And I am deeply, deeply worried at the massive intrusion of the state into the lives of the American people.
I do believe that large government makes worse people.
And I'll give you one simple example.
Americans give far more charity than Europeans.
And the reason Europeans give less charity is not because they're selfish and mean, or we are all kind and wonderful.
It is because in Europe, the mentality is if there's a problem, the government will take care of it.
My neighbor will be taken care of by the state.
Why should I get involved?
De Tocqueville, in the early 19th century, came from France, wrote the greatest book about America ever written by a foreigner, Democracy in America, and he marveled at how many associations there were, how much Americans would form non-governmental associations to take care of each other.
These are dying as the state grows.
This episode of Timeless Wisdom will continue right after this.
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Now, back to more of Dennis Prager's Timeless Wisdom.
I think, hopefully, I can bring some, shed some light on the situation.
I think the American people are smarter than we give them credit for.
Just to give you an example, I have a client, Democrat, not hard left, Democrat, works for a bank.
He talked to me today.
He was very distraught.
His whole staff is going to lose their entire yearly paycheck because they get bonused out.
And all they did today was sit around and watch TV and worry that they weren't going to make money.
So I think as soon as these people that voted for the current administration, but most importantly, gave money to the administration, start waking up, hopefully, we only have another three and a half years of this.
You know?
Because we need to stand up now and do something about it.
Because if this thing lasts eight years, 12 years, Dennis is exactly right.
And it's up to everybody in this room to go out and do something about it.
I have a comment that's killing me.
I want to reiterate what my gentleman colleague here had to say.
I think that the reason why I'm optimistic is because I'm watching right now.
I'm watching the approval ratings drop as people's eyes are opened.
I know I can't even hardly watch the TV anymore seeing these things that are happening.
And I think that there are enough people that even though we have been complacent in the past, I think that we need to be optimistic and we need to, just as he said, we need to get up.
Every single person has to start to care.
And when good people start to care, then good people can make a difference.
But it is, Dennis is absolutely right.
I mean, if we remain complacent and people don't step up to the plate and start standing for what's right and supporting people who have our values and start making a difference, then we're going to have to suffer the consequences of that.
But I do believe that in time, people will do that and we will work our way out of it.
I believe in the American spirit we've been free for too long.
And I think that's the reason why I'm optimistic.
I'm dying.
Thank you.
A comment for Dennis and a question for Colin.
Dennis, I like your idea of what you said about compartmentalizing problems and stuff like that.
I'm not a psychologist, but I understand that men are extremely good at compartmentalizing.
Women, however, their thoughts, their emotions are like spaghetti in a big ball and stuff like that.
So I don't think it's all a good thing.
It's just all wound up.
Men compartmentalize things.
Women wind things up.
Anyway, question for Colin.
Do you think the federal government is going to collectively get their act together and do what they did in the savings and loan debacle in the 80s and put together a program where they're going to buy the toxic assets and ultimately make an investment return on the investment to the taxpayers by buying these?
Okay, do the spaghetti.
First is what Colin said.
He happens to be right.
Women suffer from no.
Women suffer from depression far more than men do.
I mean it's there.
It's not because their lives are worse.
I don't.
I don't think on any objective basis.
It would seem that both men and women have different problems and or similar problems and suffer equally in a very difficult world.
But whenever I speak about men and women, I offer this thought that if we could swap brains for a day men with women and women with men this is what would happen.
Women would take a man's brain and just go.
I can't believe it.
nothing is happening.
It would actually be a service because women ask us all the time, you know, what are you thinking about?
And we say nothing, and they don't think we're telling the truth.
But we are telling the truth because if there's no game on, there's nothing to think about.
What are you going to think about right now?
If, on the other hand, if we put a, if men got a woman's brain for a day, all men would kill themselves.
There would be no man left on earth.
They would also go.
The Bad Bank Proposal00:03:27
I can't believe it.
It's so noisy.
It's so noisy, all these conversations happening at one time.
I can't believe it.
So yep you, you.
You hit the nail on the head.
I wouldn't use the spaghetti analogy.
I, if you Use humor, you're.
Are you married?
Okay, if you use humor, your wife will accept it much better.
I just brought it to him.
That's a tough one to follow.
As far as getting the bad assets off the banks, there is a proposal that's being floated out there called the bad bank idea, where the government takes all these toxic assets, holds them to maturity, perhaps refinances some of the mortgages in there, which I think is a great idea.
The problem has always been: how do you value these depressed assets?
How much does the government have to pay?
One alternative would be for the government to take these assets in, whatever they're valued at, pay for them, hold them on their books, hold them to maturity, and then have private enterprise, private investors, take that amount of money that it's no longer at the banks instead of the government just purchasing those.
Take a look at the balance sheets, see how much capital needs required to make the banks solvent again, and let private equity go into the banks at a capital gains tax-free if they hold the bank for three to five years.
You get some good management teams in there, and I guarantee everybody in this room at the toxic assets were off the bank's balance sheets would be happy to put your hard-earned money back in the American free enterprise system, capital gains tax-free for the next two or three years.
And let me tell you, the government's not making any capital gains anywhere else anyway, so it's not going to cost the government anything no matter what they tell you.
So, yes, I think that would be a great idea.
I just don't know if there's a political will to do it.
This episode of Timeless Wisdom will continue right after this.
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Today, that $114 would be worth over $15 million.
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Now, back to more of Dennis Prager's Timeless Wisdom.
Yes, my name is Chuck Thompson from World Emergency, and I had the privilege of being in a lot of Homeland Security meetings in Washington, D.C. during the Bush administration.
Warning of Coming Depression00:15:00
And the biggest conversation all the time was the next attack on this nation.
And that will wipe everything away in regards to all of the positive talk that we have here, which is great.
We will have another attack.
And it's what they don't tell you that you need to worry about.
Now, I need to shut my mouth and not say so much of what I've been told.
But the census is love your families, take care of each other, enjoy meals like this, because we won't see much of it soon.
It's not about whether there's going to be a depression.
There is going to be a depression.
We have a Kinko economy where we just go and print money, where the ink soon will be worth more than the denominations it's printed with.
Now, in regards to what you were just saying, the gentleman from Arizona, in ancient Israel, what they would do is, of course, every seven years, they would wipe out the debt.
And after 50 years, you'd have a jubilee.
That's perfect.
But as you said, the political will is not here.
And we're not going to have that political will with this administration.
So basically, we need to pray, and we need to honor God.
And we need to get ready for a new government that will replace this one.
Just an observation.
Well, that was a happy thought.
Look, you know, it's good to hear, and I mean it.
I mean, we're mature enough to hear every possibility.
Everybody thinks there will be another attack.
I don't know how one could think otherwise.
There are people who want to destroy us and will do whatever they can.
And do I think that we are as secure with this administration as we were with the previous?
No, I don't.
However, they have kept a lot of the policies intact, not all of them.
I think that President Obama is starting to regret the foolish notion of closing Guantanamo.
Europe has already announced it's not taking any of the prisoners after squawking about Guantanamo for eight years or whatever, well, seven years.
Now, okay, why don't you take them?
No, no, not us, not us.
And then all the Democrats who said it was a wrong thing, Guantanamo.
Then Eric Holder, the Attorney General, has it investigated.
And to his credit reports, turns out they're treated beautifully.
I had a man on who has been to Guantanamo about seven times, and he said, the American guards.
That's what I use.
I use that to wake up.
I hope it's not a bad sign, though, that he had his wake-up alarm while I was talking.
Anyway, the guy had been to Guantanamo, the American Marines that are there guarding them, they cannot touch a Quran with their bare hands.
I mean, is that astonishing?
They can only touch a Quran with gloves.
Anyway, now all of the Democrats who run states, they don't want any of these people either.
So where are we going to put them?
On the moon?
Frankly, that wouldn't be a great thought.
I know.
We would think similarly.
But we can't.
Now, ironically, if we are attacked, that, and God knows I don't want an attack.
I believe that that would be a wake-up call to Americans not to live in the left-wing fantasy land that currently dominates the media, academia, and the administration.
There really are bad people.
We are not hated because we have done bad things.
We are hated because we represent the opposite of what they believe in.
This notion that somehow or other our behavior has been so awesomely bad as to deserve what happened on 9-11 and triple 9-11s that might come is beyond belief.
We have died to liberate Muslims.
Remember Bosnia?
Remember Afghanistan?
We have intervened.
And remember Somalia?
This was all to save Muslims.
When did a Muslim country die for Americans?
When, for that matter, did any country die for Americans, Muslim or not?
But this will be a wake-up call if it happens.
And then, ironically, then the great reservoirs of the American spirit would come out.
So I'm not even super worried under those circumstances.
But thank you for your troubling comments.
My turn.
Finally, this comment basically is for Colin and Mark both.
I am really concerned, but by nature, I think I'm a pretty positive person.
Now, I'm trying to hang on to that positivity that I have going for me.
But when you made the comment, Colin, in regards to three and a half more years of this, that people will wake up.
Here's my concern.
The people that donated the small amounts of money to the Obama campaign were the college students that were just being spit out of college.
My niece, $20.
She couldn't afford it.
She was a struggling college student, but she gave her $20 and got her bumper sticker.
I about had a heart attack, but she did.
So I don't think those people are going to be, those young people are going to be of the mindset to realize that we made a mistake.
That's my concern and my comment.
And I'm so passionate about this.
I'm overwhelmed with it.
It's a big concern.
I think their parents are, though.
I think they're smart enough.
Oh, no, my sister's a college professor.
I can't speak for your individual sister.
This episode of Timeless Wisdom will continue right after this.
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Now back to more of Dennis Prager's timeless wisdom.
Okay, I'm not.
I don't share your optimism in that regard.
I is this the final comments.
Do any of you want to make a final comment?
I'll make a final final, but do any of you want?
Is there?
Is there a final question too, because I'll Deserved the response for the final moments.
Is there somebody else commenting there?
You want to comment, Ken?
Give him one more.
You want to give the phone here his colleague, Colin's colleague?
It's Colin's colleague.
You better be good.
No, I just, mine was more of a question.
You know, you see all the people here tonight.
And you tied morality to happiness.
And I don't find myself troubled by a lack of money or a recession or a potential depression.
What I find myself troubled by is a lack of morality and leadership.
That's what I find myself troubled by.
Now, I hear the woman's question here.
I have two of college children.
I think college children today have a sense of entitlement.
They got there easily.
But as they get out of college and they start to work for themselves, I think that that starts to diminish.
And you talked about a reservoir.
One of my questions is: you talk to a lot of people, you have a lot of listeners, you talk in large groups.
The reservoir and morality of the people of the United States, is that large enough to overcome the leadership that we have today?
Okay, I'll come in on both of you in a moment.
Do any of you want to make a final comment?
Okay, you do?
You're fine?
Okay.
All right.
I'm going to be very, very open with you.
I'm very open on the air, but I do debate something that I won't debate now, and that is I have, and I've mentioned this on the air, but I've resolved it for the radio a little differently than I will resolve it now.
And that is, do I communicate on the radio my real worries?
Because you don't want to give a downer broadcast, to be perfectly honest.
You just don't.
It's not good for your listeners.
It's not good for your show.
Hey, let me tune into Dennis and Get Depressed.
You know, this is how to give the other 99 stations in LA and other cities that I'm on, you know, more listeners.
So I convey my concerns, but so let me tell you something.
You'll find, I think, I know you'll find this of interest.
We all come from different backgrounds, and I mean philosophic backgrounds as well as anything else.
And here you'll find this of interest.
I've never said this on the radio.
I said this once before in the presence of Bill Bennett when we were on a panel at Salem in Washington, I think it happened.
Bill Bennett and I and Mark Stein.
Mark Stein Protestant, Bill Bennett Catholic, Dennis Prager Jewish.
And then it was one other time with another Catholic theologian.
Anyway, yes, who was the Catholic theologian, Sue, you remember, on two wings, he wrote, and he's a Polish background.
He's at the American Enterprise Institute.
Novak, Michael Novak.
Is it Michael Novak?
Yeah.
He's a big theologian, a Catholic theologian, a wonderful human being.
We found that the Bennetts, the Pragers, and the Novaks were more worried than the Protestants that we were with, which is, of course, in Salem radio.
These are mostly evangelical Christians who would fall under the Protestant category.
The Catholics come from Eastern Europe, by and large.
Bennett's background, I guess, is Irish, but that's the same thing in terms of human suffering.
And Novak comes from Poland, I believe, which is only suffering.
And the Jews come from a background which is only suffering.
So we who come from that background are more worried about America than the Protestants are, as a general rule.
Because we know how easily civilization crumbles, because it's fallen on the heads of Catholics and Jews more than it's fallen on the heads of Protestants.
So this may be a factor. in the division that you even may find at this table.
And I think I'm right.
I think I'm right because civilizations do crumble.
There is no guarantee that the next generation will be as wonderful as the previous.
The greatest generation, that's my parents who fought in World War II, produced the worst generation in American history, in my opinion.
Okay, the most narcissistic, stupid generation in American history were the baby boomers.
I am a member of the stupidest generation in American history.
I don't think I'm stupid, because I know that I was alienated from my generation since college.
When I saw these quasi-fascists take over my university in the name of anti-war demonstrations and shut down classes, and I saw the greatest generation give in to them, it was a trauma.
That was a trauma, not the economics.
It was a trauma to see the deans of Columbia University give in to the thugs who took over the classrooms at Columbia in the name of anti-war.
I've never recuperated from that.
I realized that the foundations are not nearly as strong as I thought they were.
And when you add the entitlement issue and the sense of rights over obligations, when you have Jay Leno have a feature on his show to show the utter and total ignoramuses produced by our colleges, people who they couldn't answer, I mentioned this on the air, I only watch TV when I'm on the road.
So at my hotel room last week, I watched Jay Leno, and he had this quiz with three adults.
They didn't know when Columbus discovered America.
One of them said 1842.
Now people laugh, and totally understandably, it is almost hilarious.
They asked him what the Iron Curtain was.
So the two women didn't even buzz.
The guy buzzed, said he thought it was a Pittsburgh Steeler defensive maneuver.
I don't believe that the average graduate of college can identify Joseph Stalin, one of the three greatest mass murderers in the history of earth.
They know all about global warming, but they know nothing about Joseph Stalin.
And, well, Mao, forget Mao.
They're probably wearing a Mao button somewhere.
Did you know that there's a restaurant in L.A. named Mao?
The greatest mass murderer in history has a restaurant name, and they think it's cute.
Society's Lost Values00:03:56
It's not that they support his policies.
They just think it's cute.
So I am worried.
Of course I'm worried.
Why would I not be worried?
Where are the indications of great hope?
The university, the elementary school, the high school, television, TV news, newspapers, movies?
As the psalmist said, from where will my salvation come?
And he didn't mean salvation.
He meant help.
Not salvation in a theological sense.
From where will my help come?
Well, the answers, from God.
Okay, that's good.
And if God wants to intervene, we're in great shape.
But if it takes divine intervention, I don't know if we're in great shape because God decides whether to intervene.
We don't.
So barring divine intervention, there really are reasons to be worried.
And they're not economic.
The economic is the symptom.
It is not the cause.
And so I do have these terrible fears about the moral level.
You mentioned leadership, and I'll conclude because I don't want to keep you so long.
It's already gone beyond time.
In fact, you'll be charged.
Actually, we're very grateful to you for coming.
But you mentioned leadership.
Leadership is a big deal, but the strength of America has not generally been great presidents.
It's been that the guy in Iowa, we always thought, I always thought we romanticize Iowa.
All right, we romanticize Iowa.
Well, so was Grassley from Iowa.
And we romantic, but the values in Iowa are no different right now than the values in California.
That backbone, the heartland, has been infected.
TV gets into Iowa just as much as it gets into Berkeley.
The professors at the University of Iowa are identical to the professors at Columbia.
And so I don't know where to look for this core strength.
I did.
I mean, frankly, I'll tell you where I looked.
Evangelical Christians.
That's where I looked.
And I'm a Jew saying this, so I hardly have any vested interest in this.
That was the core.
But they've been whipped so bad.
They want to go back to prayer in many cases.
And they want to, or even start challenging them.
Maybe we're wrong.
Time magazine hates us.
Newsweek hates us.
We must be wrong.
So now you have evangelical leaders on behalf of global warming prevention.
Like this is the great message that the evangelicals want to bring to the world.
So yes, this is, it's not to leave you depressed.
I'm not depressed.
But yes, I'm bloody worried.
There are no guarantees in life.
Every generation is born a tabular rasa morally, a blank slate.
You don't get morality by osmosis.
That's what the greatest generation's big error was.
We don't have to articulate American or Judeo-Christian values to our children.
They'll just get it because, hey, it's all around you.
You pick it up from the air.
You don't pick these values up from the air.
They have to be, and you will speak about these things when you wake up and when you walk by the way and when you rise up and when you lie down, Deuteronomy.
Because if you don't talk about these things all the time, then the bad values prevail.
So it's a big task, and there are no guarantees, not even for our beloved United States of America.
Thank you so much for coming.
Thank you.
How to Raise Children00:01:55
Tomorrow, Un Timeless Wisdom with Dennis Prager.
I have, I'm going to throw out a theory today that I threw out once, and it is simply this.
This is about our society at this time, or at least for the last generation.
Something happens to a lot of women around age 29 in the way they look at life, so much so that it may in fact be a cause of a disproportionate number of marital breakups.
Join us tomorrow to hear more on Timeless Wisdom with Dennis Prager.
This has been Timeless Wisdom with Dennis Prager.
Visit DennisPrager.com for thousands of hours of Dennis' lectures, courses, and classic radio programs, and to purchase Dennis Prager's rational Bibles.
Here's something most people don't know.
When Warren Buffett was just 13 years old, he didn't put his money into a savings account.
While other kids were earning next to nothing at local banks, Buffett put $114 into a little-known investment.
Today, that $114 would be worth over $15 million.
And it wasn't a risky trade.
It wasn't even insider knowledge.
It was an account that's been around since 1888.
And over the last 25 years, it's averaged 29% a year.
That's what happens when your money is allowed to compound.
Compare that to today's savings accounts, paying less than half a percent, while inflation quietly eats away at your buying power.
Buffett understood early, banks are great businesses, just not for savers.
If you'd like to see what some investors call the 29% account, go now to secretaccount29.com.