e-con-o-mist (i kon’a mist), n. one who

philosophizes about other peoples’ money.

In case you haven’t heard, it’s now official. America can avoid a depression. The program offered by Dennis F. Paulaha, Ph.D. Economics, spokesman for RemortgageAmerica, is simplicity itself. The Plan: The federal government offers every U.S. citizen a 30-year mortgage loan of $500,000 at 1½% fixed rate of interest.

As Dr. Paulaha explains, the plan will stop falling home prices, create jobs, and increase tax revenues, because “it will let everyone save and spend more.” Acknowledging probable losses by lenders during a process where government oversees mortgage refinancing, the program is nonetheless justified for its likely economic stimulation. Apparently, simply spending money from whatever source is considered by proponents as beneficial, in keeping with a popular adage: spend yourself into prosperity.

The one question not addressed is where the money comes from. If only fifteen percent of America ’s 300 million citizens avail themselves of the promised loan, a sum of $22.5 trillion must materialize. With controversy concerning disposition of a $700 billion bailout appropriation, how might the economic community react to a sum 32 times greater? There is, of course, one way Uncle Sam can come up with this amount. He can simply turn on the printing presses and create cash out of thin air. This method is not novel; it’s been tried before. During 1922-23, Germany ’s Weimar Republic resorted to printing money as a means of bailing itself out of its World War I reparations obligations. By November 1923, when the currency exchange rate reached 4.2 trillion marks to the dollar, the economy collapsed, taking with it the entire wealth and stability of the middle and lower middle classes.

Be aware, bizarre plans such as this one by RemortgageAmerica show up from time to time. It’s endorsement by a credentialed economist is unsurprising. The economics profession is rife with absurdity, as is any field based upon intuition and supposition rather than upon observation and documentation. Anyone who actually places faith in economic pronouncements need only reflect on the performance of former Federal Reserve Chairman Alan Greenspan, the nation’s most celebrated financial authority, as he testified on October 23, 2008, before the House Committee on Oversight and Government. Badgered by lawmakers, he admitted his error in opposing regulation of derivatives and acknowledged financial institutions didn’t protect shareholders and investments as well as he expected. Under questioning, he recanted his prior assurances that banks will act to protect their shareholders and institutions, conceding the meltdown revealed a flaw in a lifetime of economic thinking that left him in a “state of shocked disbelief.”

If there’s a lesson to be learned from Dr. Paulaha’s advice on how to avoid a depression, it’s reaffirmation of the basic rule of the skeptic: Ninety-five percent of everything is nonsense.

News Item: Survey Reveals Students’ Dishonesty. For those of you who imagined otherwise, high-school-aged youths will shoplift from a store or cheat on an exam. It’s official now. The Josephson Institute, a nonprofit foundation based in Los Angeles , surveyed 29,760 students at 100 randomly chosen high schools throughout the nation. Within the past year, thirty percent acknowledged having stolen from a store while sixty-four percent admitted to cheating on a test. Understandably, all were queried anonymously. The institute’s founder and president, Michael Josephson, expressed dismay at the findings.

I, too, express dismay—that a prestigious foundation would devote time and effort collecting and tabulating data merely to substantiate that youngsters will filch or cheat. During the years I taught chemistry at a community college, not an instructor in my department failed to recognize that, given an opportunity, most students will game the system. We generally concluded that about a fourth of students will cheat without provocation, a full half if an opportunity presents itself, with the remainder refusing to participate. We never knew what portion of the “honest” students abstained simply out of fear of being caught.

But perhaps most disconcerting of all is that Mr. Josephson, immersed in the intricacies of ethics since 1987, is perturbed by the realization that human beings continue to behave as they have for thousands of years. Does anyone with the slightest perception of human nature doubt that deceptiveness and chicanery are built-in instincts? If you witnessed the election season recently concluded, you can retain no uncertainty as to the basic dishonesty of the human race and its institutions.

This gets us into the realm of the nonprofit foundation. Evidently this survey of the obvious, and its publicized results, serves a purpose. It attracts attention. And attention is what the nonprofits must attract. Mr. Josephson’s Thanksgiving Letter, appearing on the institute’s website, explains it clearly: “. . . the simple fact is we are a nonprofit organization and we need financial support to keep doing all that we are. Sadly, our needs are greater than ever in these tough economic times where many sources of our income are drying up.” He concisely sums it up in the final sentence: “This is not intended to make anyone feel guilty, but I do want to be frank about our need and direct my request that you include the Josephson Institute as one of the organizations you support in your year-end giving.”

Let me add a final thought. Operating a charity is a tough racket. Choosing the ones to which you will contribute can be even tougher. Be selective.

Activating a newly updated credit card has always been an effortless matter. Dial the 24-hour toll-free telephone number provided, enter the 16-digit card number, punch in the last four digits of your social security number, and finally press “1” to confirm proper receipt. It’s that simple. Your new card is now valid.

As I’ve just described it, that’s the way it is . . . or rather was. Times change. When dealing with Citicorp, one of the major credit card issuers, what used to be the ending is now the beginning. After confirmation, you’re no longer bid an electronic adieu. Instead, a real live person replaces the recorded message, offering you the firm’s service-oriented commitment. “How may I assist you,” he asks. “Is everything satisfactory?” With the formalities concluded, the true purpose of his presence becomes evident. There are products to be sold, and you are clearly captured clientele. Your credit card is not complete without a variety of extras, all at a price. During my recent encounter, the litany of offerings came one after the other. I successfully groped for legitimate-sounding reasons why I didn’t want any of them—until he got to the last one. It became clear that he did not intend to take “no” for an answer. He informed me of my need for protection. What if someone steals my identity? Their monitoring service would give me the notice I must have when my card is stolen—and best of all, it would be free. Though it took a bit of prodding, he eventually disclosed that the “free” part expired after 30 days, when it automatically became $9.99 per month changed to the card. He was tough to get rid of, attempting to close me eight times during a 12-minute harangue. It was one of the hardest attempted sells I’d ever experienced. And why not? Consider what’s at stake. Citicorp controls tens of millions of credit card accounts. For every million schlemiels they can coerce into that program, they stand to gross $119,880,000. As you see, billions can be made, and as the late Senator Everett Dirksen once said: “A billion here, a billion there. Pretty soon you’re talking real money.”

If you think the experience I’ve just related is simply a matter between me and Citicorp that doesn’t affect you, you’d better think again. What I’ve just described is the corporate world in which we live. Innovative marketing is what it’s now all about, and every prominent firm will, sooner or later, embrace these practices. You will find yourself regularly fending off this sort of pitch—and worse. For this reason, you’d better develop a thick skin and a skeptical attitude to go with it, because you will be put-upon in ways you cannot yet imagine.

A concluding thought:
At a time in the past, many successful firms operated on the principal that the customer deserved to be treated honestly and with consideration. For whatever reason, this is no longer the way it is. To imagine otherwise is to place yourself at a serious disadvantage.