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Freedom Means Being Free to Lose

One of the worst things about the crash of 2008 is that an entire generation has learned that failure and loss is unacceptable in the financial marketplace.  Failure was not permitted as institutions were propped up with taxpayer money and given new life.  Many homeowners who had mortgaged their properties and could not live up to their commitments were allowed to remain in their homes with debts rearranged and restructured.


Since that crash of 2008 there have been many other holes in the global financial system revealed. The economies of Europe are lethargic, the result of decades of red tape and misguided policies.  The Euro experiment, as fascinating and hopeful as it may be, teeters on collapse and every few months the ECB proclaims its commitment to do anything to preserve the union, and the union caves in and gives Greece another free pass.  Japan’s governmental indebtedness is at critical levels, with debt service eating up a massive percentage of the government’s total budget, and this at historically low rates.  The U.S., with its relative strength, is still plagued by an historic disparity between the have’s and have-not’s, massive government debt and huge deficits that seem to be irreversible, and a way too large percentage of those who have abandoned the search for employment or are severely underemployed.  On top of that, the world’s geopolitical situation is like a powder keg.  Yet, with all of that, stock markets have performed excellently, bond markets are near all-time highs, and real estate values around the world are also at or near all-time highs.  Central bankers around the world have made sure that there is little pain experienced.

The financial market is not the only arena where others wish to protect us from pain, and deprive us from learning and growing.  My 6 year-old son’s kindergarten has eliminated the swing from their playground because a girl injured herself falling off, and they plan to eliminate the monkey bars shortly for fear of injury.  And there are many other examples.

Is this good?  Is it good for pain to not be experienced?  Isn’t it from pain that lessons are learned and corrective actions taken?  Avoidance of consequences inevitably has its own consequences.  Freedom is beautiful and messy.  Freedom leads to actions and risks taken and mistakes made and lessons learned, and growth achieved.  Freedom without a tolerance for loss, failures, and mistakes is not freedom.

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