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Double, double, toil and trouble

So, it turns out that "the great moderation" -- the curbing of inflation, diversification of risk across global institutions, and lengthy economic expansions that were meant to shorten and temper recessions, if not eliminate them altogether -- is all just a bunch of shit! Yes, the gospel we've heard since roughly the end of Bush's first term that global markets have spread risk and strengthened monetary policy to the degree that first-world economies are more or less in a state of permanent growth turns out to be largely imaginary, fueled by -- get this! -- "a huge speculative bubble, first in stocks and then real estate, that hid the economy’s rough edges".

(insert 'wah-wah' trombone here)

Wow! A speculative bubble, you say! Gosh that's certainly unexpected, and certainly not something that anyone could have anticipated who had paid even the slightest bit of attention to the history of economics going back as far as 300 years. No, SHOCKED, SHOCKED we are at this completely surprising development that no one could have predicted.

Fucking unbelievable, man. It's literally the same bullshit every time. The economy starts to roar, and rather than look at the absolutely clockwork predictability of historical patterns, a bunch of profiteering scumbags at the top, all of whom stand absolutely to gain from their own propaganda, sell the whole goddamn country on the idea that things are fine now and we have finally conquered the vicissitudes of a closed economic system. Things will never be bad again, they tell us: the good times will be longer, the bad times will be shorter (if they ever even happen), and everyone should spend, spend, spend! And the same old people collect their checks, and when it turns out, as it always does, that a lot of the capital involved in their model was imaginary, they'll shrug and retreat back to their nice big paid-for houses while the rest of the country competes for a second job.

Every time it's the same, and every time, they go one step further, not only collecting their fees and shares for the bullshit they're selling, but prescribing political steps that can be taken now that there's no need for the government to help poor people anymore, since they can all get rich on whatever the magic cure of the moment is. And those steps are also always the same:

1. Deregulation.
2. Privatization.
3. And most of all, always and forever, reduction or elimination of taxation, especially for the rich.

And every time, it's the same people who get the sugar and the same people who get the shit. Who will remember it come November? The same people who remember it from the last time, most likely, a set whose components grow fewer every year. The rest of them will just remember all those abortions or that one time the queer parade came to town or how the terrorists are trying to make America look weak, and they'll vote in the same free-market shitheads who will preach the same gospel again until POP goes the next bubble, and then they'll shrug and go back home until election day.

The criticism from the right of social democracy usually plays into notions of self-hatred on the left, of slavish devotion to airy intellectualism or simple jealousy of those who can hack it by those who can't. I say social democracy exists because there are people who can fucking see with their eyes open.


Jan. 23rd, 2008 03:50 pm (UTC)
"Be fearful when others are greedy, and greedy when others are fearful." -- Warren Buffett
Jan. 23rd, 2008 04:05 pm (UTC)
It's pretty depressing, ain't it? That really is the most frustrating thing, that they just never learn. They always pretend like this is the first time this ever happened, and there's no way anyone could have known.

Edited at 2008-01-23 04:17 pm (UTC)
Jan. 23rd, 2008 04:23 pm (UTC)
It seems like it's we who never learn. The people peddling the bullshit have learned quite well.
BLANK - archaica - Jan. 23rd, 2008 04:27 pm (UTC) - Expand
Jan. 23rd, 2008 04:10 pm (UTC)
Hey, at least we have the supreme court on our side and they're totally ruling in favor of corporations and the individuals behind them being held accountable for their actions!

Jan. 23rd, 2008 04:16 pm (UTC)
Y'know, someone linked me to the World War Livingroom bit, and I added you as a friend so I could keep up with that,but I really enjoy reading your stuff. It's a tragedy that people can't get their heads out their asses.
Jan. 23rd, 2008 04:24 pm (UTC)
Thanks! WWLR will be back, I promise; once I get my camera working again and get back from a bunch of road trips. But I hope you and the other people who arrived for WWLR will stick around...
Jan. 23rd, 2008 04:16 pm (UTC)
I'm still seething over Uncle Jimbo's statement that, "I'm no economist, but I think the economy is going to be just fine!"

Me? I'm just hoping that, if the Second Great Depression, it will at least inspire some Americans to give the participants in shows like "My Sweet Sixteen" and "Housewives of Orange County" the Jacobin special.
Jan. 23rd, 2008 04:18 pm (UTC)
Well said. I was actually arguing about this with someone of the free-market-uber-alles school yesterday about this and I wish I could've read this beforehand. It's a fundamentally fucked part of capitalism that every major disruption is created by people making money by shuffling paper around and not people who, you know, actually make shit or do something that improves other peoples' lives. Then the rest of us have to suffer because some fuckheads thought that housing prices or stocks will increase exponentially forever and ever.
Jan. 23rd, 2008 04:19 pm (UTC)
What can I say but - aaa-men.

Also, why is it every story I've heard so far has executives and experts admitting the mortgage trading structures they were using were "too complicated for anyone to understand". Anyone? Really? Isn't that code for "unworkable bullshit"?
Jan. 23rd, 2008 04:26 pm (UTC)
Yeah, when they were all making money, they seemed to understand it just fine. It's only acquired the sheen of incomprehensibility now that it's all fallen to shit.

And, again, it's not like this sort of false-capital bubble hasn't happened before, like, FIVE HUNDRED TIMES...
BLANK - archaica - Jan. 23rd, 2008 04:28 pm (UTC) - Expand
Jan. 23rd, 2008 04:31 pm (UTC)
you were born in the US, right...?
you've got my write-in vote for president.

after seeing this crap over and over again, it's honestly kind of numbing. and the more you study it, the less it works; and the more i am certain that the people with the money have no real concern for those without.

also humorous is the idea that many republicans have that charity/ welfare will be taken care of by altruistic people, when the basic right-wing capitalist model give an extreme disincentive to giving-- flat taxes or no taxes give no incentive to cut one's taxes (where charity= tax breaks) and giving up of 1 dollar is one less dollar a person can invest.

and the asshats who promote the free market's efficiency vs the government's inefficiency, well, i like to know that SOMEONE is trying to halt the march of fat cat robber barons with monocles and pocketwatches, that i'm not entrusting my future to something that could be fly-by-night shit.

and with the economic trickeration and mechanisms that banks are inventing, we have no fucking idea how much of our wealth is "real" if someone or China makes a run on their invested money.
Jan. 23rd, 2008 04:33 pm (UTC)

People say we're at Panic but I kinda don't believe it.
Jan. 23rd, 2008 04:36 pm (UTC)
That's awesome.
Jan. 23rd, 2008 04:35 pm (UTC)
Who's profiting off this crash?
Jan. 23rd, 2008 04:37 pm (UTC)
this guy ... and apparently Goldman Sachs, but only because their risk managers completely disregarded what their traders were doing.
BLANK - perich - Jan. 23rd, 2008 04:44 pm (UTC) - Expand
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Jan. 23rd, 2008 04:43 pm (UTC)
Add to your laundry list of links the last time exactly this same thing happened. I mean, it's not an analogous case or an issue where the parallels are obvious. Literally the exact same thing: banking institutions throughout the U.S. invested heavily in divvied-up mortgages and the Republicans in office bailed them out when they tanked.

It's literally the same mistake twenty years apart. Several of the people involved in today's mistake were probably working in finance in '87! THE HELL?!
Jan. 23rd, 2008 04:49 pm (UTC)
Re: also:
Hell, the President's own BROTHER had to get bailed out. You'd think Neil would have maybe nudged the Prez ... when he wasn't engaging in sex tourism that is.
Re: also: - ninafarina - Jan. 24th, 2008 01:27 am (UTC) - Expand
Re: also: - ludickid - Jan. 24th, 2008 01:41 am (UTC) - Expand
Jan. 23rd, 2008 07:47 pm (UTC)
Amen, and thank you for saying all the shit that's been in my head for years. Funnily enough, I'm no economist - ask my preceptor for Econ 101, Jean-Paul Giguere, that smarmy non-English-speaking Canuck - but it would take willful ignorance to forget that the economy works cyclically. It requires only a bit more intelligence than that possessed by the average gibbon to figure out the factors that drive the economy and how they interact. And yet, we keep making the same farking mistakes over and goddamn over again. I am as angry as you are, and also as powerless to do anything about it except rant and fume.
Jan. 23rd, 2008 08:00 pm (UTC)
Well, I don't actually feel powerless about this...although we seem devoted to the notion that you can never, ever tell businesses what to do, we at least have the power to elect people who won't make things worse by pursuing the three political steps I listed.

I mean, time will tell if we actually WILL do that, but at least we CAN.
BLANK - lester22 - Jan. 23rd, 2008 08:11 pm (UTC) - Expand


flavored with age
Gun-totin', Chronic-smokin' Hearse Initiator
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Leonard Pierce is a freelance writer wandering around Texas with no sleep or sense of direction. If you give him money he will write something for you. If you are nice to him he may come to your house and get drunk.

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