Like others, I have followed the U.S. fiscal crisis by observing various pundits of different stripes. But as your faithful Ideas Guy, I have also sought solace and even wisdom in the more shadowy realms of philosophy.

So, as if some invisible force guided my hand, I reached behind my computer to my bookshelf and pulled out Jacob Needleman's Money and the Meaning of Life.

Needleman is a professor of philosophy at San Francisco State University and the author of many popular books. He takes his philosophy seriously as a moral exercise, unlike many academic philosophers who view their discipline as a technical workout.

Needham writes clearly with an eye to the general reader. He also likes to throw in movie references.

In a Western called Waterhole No. 3, James Coburn plays a "high-spirited card sharp who snatches a chest of gold bullion" away from thieves who stole it from the U.S. Army. Lots of chases ensue. At the end, he turns to the audience and tells us, smiling: "Maybe we take gold too seriously."

Then moments later, amid gunshots, Coburn turns to the viewer again. He sternly reconsiders. "We don't take gold seriously enough," he tells us in his last words to the audience.

Needleman uses the film to tell us that, like Coburn, we too don't take money seriously enough.

Nothing has become something

By this he means that money is not just paper or metal. Money carries an enormous freight of symbolic baggage. It is "congealed human energy."

The forces that we used to ascribe to the gods — overpowering strength or majesty — are now poured into our money (and its offshoots, like credit and equity).

Money has always stood for worth, value and, at a more grounded level, human industriousness. Throughout the ages, the raw faith of kings and traders was poured into these scraps and chits.

Yet, in the end, even money itself was a limited commodity in terms of its very own importance.

Needleman reminds us that for eons, other civilizations didn't even employ money as a central marker. Think of the Romans or the Egyptians. They valued land, yes, and slaves as well as armies and salt, spices and foodstuffs. All blessed by their obsequious priests.

But our current business of international finance is a modern phenomenon and it's dizzyingly complicated. We don't even know what money represents anymore. Or what it's worth. Nor do many of those who produce these commercial "instruments."

James Watson of Harvard, the co-discoverer of DNA, said that the best minds used to go into science. Now they go into finance. He bemoaned the fact: all this brilliance in service of financial ingenuity. And he said that before the recent Wall Street meltdown.

One thing the pundits are telling us now is that even experts can't tell the good money from the bad. Bad mortgages (debts) are repackaged and rolled into "products" to be resold as investment "securities."

How did the lack of money become an "investment"? How did nothing become something?

It sounds like a creation story of the gods who created the universe from emptiness. (I like the creation stories better; they make more sense.)

Human factor to economics

But the gods of clarity might be shining down on us, finally. Some economists who practice the "dismal science" are beginning to revise the way they see their discipline.

James J. Shiller of Yale University is the author of Irrational Exuberance. He tells us economics is a field filled with arcane, mathematical models. Nobel Prizes are given to economists who see themselves as scientists, not as lowly money managers.

But Shiller, among others, is opening his field to other disciplines, like psychology. When dealing with money, you must factor in human behaviour.

Economists have always believed human beings made choices by being rational and self-interested.

But the economy is a human enterprise, and people, says Shiller, get caught up the "irrational exuberance" of bubbles.

A bubble is a psychological phenomenon. We might be individually rational, but collectively, we can be out of our bloody minds.

You can hear Shiller give a good account of his ideas at this link.

For Shiller, bubbles like the subprime mortgage fiasco are "speculative crises." People get excited. They know what they're doing may not make long-term sense, but lots of people are making piles of money. The market keeps going up. Besides, it's backed by experts, financiers and governments.

So people ask themselves: Am I a fool? Why don't I join in?

What goes up…

Translate this to the subprime crisis in the U.S.: you could buy a house with no money down, pay an absurdly low mortgage (for a few years), and if you couldn't afford it anymore, sell the house. Since real estate would always rise, you'd make a profit. So goes bubble thinking.

But as Shiller tells us, something funny is going on when everyone thinks they're going to get rich.

So the bubble bursts. And people, caught up in this rational madness, are stuck with devalued houses and must walk away from their "investments."

People are told all sorts of myths, says Shiller. Like buy real estate because "they ain't making no more land." Only people do one better: they buy houses that stand on tiny plots of earth. Houses aren't land.

People didn't do this 50 years ago, Shiller says.

But people talk. Bits of information become wisdom. And people begin to believe all sorts of things. They believe the stock or real estate market will always go up.

He asks: where did people get this idea? Is it really rational?

So, we are back to money as an instrument of faith. We listen to authorities, our very own financial priesthood, which includes real estate agents, brokers and public servants.

Shiller wants more "disinterested" financial advice for the ordinary person. People who advise you with no stake in what they say. In a sense, he wants people to be protected from their own giddiness, among many other institutional changes.

Be wary of financial idolatry

But let me return to Jacob Needleman and Money and the Meaning of Life. Money is congealed human energy bound up into bits of paper — but it must be comprehensible. It must be transparent. It must mean something solid. Otherwise, it's just a hazy, religious artifact.

There was a good reason the ancient Hebrews warned against idolatry — the First Commandment. Beware of false gods who inhabit the marketplace. Beware of idols who spout obscure formulas. Be wary of collective madness.

Let Economics 101 — and money itself — begin to make sense again.