People love their myths. For example, “If Teddy Roosevelt were alive today, do you know what he would say? He’d say break ‘em up.” That’s from Bernie Sanders’ “Break Up the Big Banks” speech in July 2015. We love it. After all, the big banks and their financial cousins had crashed our economy just seven years ago, and we still had not completely recovered. So we love the idea of the swashbuckling Teddy Roosevelt riding into town and breaking them up. Serves ’em right.
That sort of feeling is what powers myths with their charismatic heroes and villains. But because myths aren’t true, they need some protection from reality. Like many political myths, this one makes a claim about what would happen if, in this case, Teddy were alive today. Because he isn’t alive, it’s hard to refute the claim. That sort of uncertainty protects our beloved myths from reality.
So how can we tell if the Teddy-and-the-banks myth is true? Here’s how. It happens that Roosevelt did face a banking crisis that involved big banks failing. And we know what he did. He went straight to J. P. Morgan, the biggest banker bar none, and asked him to help save the big banks! Morgan said he didn’t have enough money, so Teddy had the U.S. Treasury help him out. And Morgan saved the failing big banks with no talk of breaking them up.
Most of our myths can be debunked this way, but why bother? They make us feel good, and that’s a plus. Unfortunately, they often mislead us into making serious mistakes. Often this happens because they promote ideologies (isms), which are like political religions. So to understand some of the myths, we need basic knowledge about a few isms, such as socialism, capitalism and a few others. I’ll start there and then debunk some of the myths.
See also Chapter 7.2
Ripped Apart
