Thursday, February 7, 2008

Why Don't We Learn From History?

"While in common with the great majority I have to earn a living, I have the rare good luck of being able to earn a living by trying to discover the truth of events, instead of trying to cover it up, as so many are compelled, against their inclination, by the conditions of their job. ... For, on the contrary, history is the essential corrective to all specialization. Viewed aright, it is the broadest of studies, embracing every aspect of life", 7. "Nothing can deceive like a document. Here lies the value of the war of 1914-1918 as a training ground for historians. ... After twenty years' experience of such work, pure documentary history seems to me akin to mythology. ... Many are the gaps to be found in official achives, token of documents destroyed later to conceal what might impair a commander's reputation", 9, my emphasis. "Yet if the historian comes to find how hard it is to discover the truth, he may become with practice skilled in detecting untruth--a task, which is, by comparison, easier", 10. "If a man reads or hears criticism of anything in which he has an interest, watch whether his first question is as to its fairness and truth. If he reacts to any such criticism with strong emotion; if he bases his complaint on the ground that it is not 'in good taste,' or any question except 'Is it true?' he thereby reveals that his own attitude is unscientific", 10-11. "To write true history is always offensive to those who have an interest in concealing it, but [Nazi] Germany was the first country to make it a criminal offense", 12. I add first Western country. It has been criminal to criticize Islam in Islamic countries for 1,400 years. "Yet the longer I watch current events, the more I have come to see how many of our troubles arise from the habit, on all sides, of suppressing or distorting what we know quite well is the truth, out of devotion to a cause, an ambition, or an institution--at bottom, this devotion being inspired by our own interest", 13. "We learn from history that those who are disloyal to their own superiors are most prone to preach loyalty to their subordinates. ... Loyalty is a noble quality, so long as it is not blind and does not exclude the higher loyalty to truth and decency. ... For 'loyalty' analysed, is too often a polite word for what would be more accurately described as--'a conspiracy for mutual inefficiency'," 15.

"Despotic rulers ... manipulate the currency, to make the economic position of the State appear better than it is in reality. ... They expand the superstructure of the State while undermining its foundations--by breeding sycophants at the expense of self-respecting collaborators, by appealing to the popular taste for the grandiose and sensational instead of true values, and by fostering a romantic instead of a realistic view--thus enabling the ultimate collapse, under their succesors if not themselves, of what they have created", 20. "Thus the thinking man must be against authoritarianism in any form--because it shows its fear of thoughts which do not suit momentary authority", 21. "Civilization is built on the practice of keeping promises", 33.

"The British people and their leaders are so politically-minded that they seem to be quite incapable of grasping the natural workings of the military mind abroad in the matter of foreign relations", 38. "One of the clear lessons that history teaches is that no agreement between governments has had any stability beyond their recognition that it is in their own interests to continue to adhere to it", 52.

Source, Why Don't We Learn From History, B.H. Liddell Hart (BLH), 1944, my favorite historical essay. Why now? Why cite this now? Because in the current SFAS 140 flap, many have engaged in "documentary history". A bank-created piece of paper supporting non-consolidation of its QSPEs will not impress me. It's a piece of paper. So? BLH writes, "The French were often more subtle; a general could safeguard the lives of his his men as well as his own reputation by writing orders, based on a situation that did not exist, for an attack that nobody carried out--while everybody shared in the credit, since the record went on the file", 9.

A bank produces 1,000 pages of "file stuffer" to justify QSPE non-consolidation and "we" should genuflect in the "file stuffer's" presence? Why? It was prepared contemporaneously, it is admissible in court as a "business record" after "authentication" by the "records custodian". So? Using Robert Steel's "royal we", "We are not impressed", favorably. If a bank should repurchase its QSPE's assets after they are "modified", what can I conclude? The bank is run by barbarians, running to government "bully boys" to abrogate its contracts. Oliver Wendell Holmes once explained contracts this way: a contract is an agreement to do something and get something. And if you don't do it, to pay damages. This is so simple, what's not to understand? How much in damages should the banks pay the holders of QSPE assets? Tens of billions I guess.

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