The Global Economic Crisis and the Experts
If it weren't for the suffering engendered by the global economic crisis, I would be laughing myself sick. None of the self-styled pundits and experts touted in the media knew it was coming. Other than a couple of mavericks, ignored by the mass media and especially the political leaders, none of the economists foretold it either. I, on the other hand, did, expecting it to happen any time in the last three or four years. The obvious signal of the coming crisis would be the imminent collapse of the housing bubble. This spring, I saw that the US housing market was really and truly in trouble, would soon collapse, and due to the interlinked nature of contemporary economies, the rot would spread globally. So I dumped my mutual funds, saving a chunk of my retirement money. In the years previous to this, I had paid off my mortgage, and indeed, had chosen a house within walking distance of down town and a yard big enough for a garden, all in preparation for the ''big one.''
I write this, not to pat myself on the back. I am a retired health care worker, not an economist. It doesn't take a genius to figure out the basic nature of the economy, just a little reading and a dollop of common sense. This same common sense suggests that you should read material critical of the system rather than its touts and ideologues, since they have a stake in it. One should no more believe capitalism's shills, than believing advertising for dish soap.
You find that crisis is endemic to the system, a relatively minor turn-down (that still puts millions out of work!) every 5 to 10 years and a whopper once and a while. Speculation booms are usually the last event before a crisis. A fall in profit in "real" industry – industry that makes things – due in part to market saturation, leads to speculative investment in areas such as real estate. As the value of a speculative product is largely hot air, eventually the balloon bursts, bringing the whole structure down with it. The situation was made worse by deregulation of the financial institutions which allowed vast frauds to be perpetuated.
Getting back to the pundits, experts, and economists who "didn't get it." I suspect that on the sly, most of them did, and have their money stashed safely. But their job was to pimp the system, to get as many suckers rounded up as possible and to protect the political gangsters and corporate bandits who set up the financial fraud.
These same pundits, experts, political gangsters and corporate bandits now claim "the turn-down should end by 2010", "Canada won't be effected much", and "de-regulation wasn't the problem."
They expect us to believe them?
I write this, not to pat myself on the back. I am a retired health care worker, not an economist. It doesn't take a genius to figure out the basic nature of the economy, just a little reading and a dollop of common sense. This same common sense suggests that you should read material critical of the system rather than its touts and ideologues, since they have a stake in it. One should no more believe capitalism's shills, than believing advertising for dish soap.
You find that crisis is endemic to the system, a relatively minor turn-down (that still puts millions out of work!) every 5 to 10 years and a whopper once and a while. Speculation booms are usually the last event before a crisis. A fall in profit in "real" industry – industry that makes things – due in part to market saturation, leads to speculative investment in areas such as real estate. As the value of a speculative product is largely hot air, eventually the balloon bursts, bringing the whole structure down with it. The situation was made worse by deregulation of the financial institutions which allowed vast frauds to be perpetuated.
Getting back to the pundits, experts, and economists who "didn't get it." I suspect that on the sly, most of them did, and have their money stashed safely. But their job was to pimp the system, to get as many suckers rounded up as possible and to protect the political gangsters and corporate bandits who set up the financial fraud.
These same pundits, experts, political gangsters and corporate bandits now claim "the turn-down should end by 2010", "Canada won't be effected much", and "de-regulation wasn't the problem."
They expect us to believe them?
posted by Larry Gambone at
10:13 AM
7 Comments:
I am worried about my college fund disappearing. It's in a mutual fund. I could probably find a tolerable job to put myself through college, but I liked the option of going full time.
Luckily, I was born to a labor lawyer father and gained a labor lawyer stepmother. You could say our household is pretty culturally liberal and friendly to the idea of mutual aid. Isn't it ironic that a "red diaper baby" would go on to discover what anarchism is? ( :
Glad to hear you've made it out ok so far.
I hope your fund survives Nick. And your origins not so ironic - a lot of us have our roots in social democracy.
The situation was made worse by deregulation of the financial institutions which allowed vast frauds to be perpetuated."
The last act of significant banking deregulation was signed by Bill Clinton in 1999. There’s also the issue of the Community Reinvestment Act, which encouraged laxer lending standards in order to attract minority borrowers who couldn't pay, also passed during the Clinton-era (I'm sure I'll get labeled racist for that one, as leftists always do when someone disagrees).
Really, it doesn't do you credit to claim to be "reading material critical of the system" while still parroting the mainstream media blathering that "deregulation" as the cause.
Being that statist intervention was the cause (Fannie Mae and Freddie Mac ring any bells?), it's totally essential to the capitalist system that statism continues to be presented as a cure to its own problems, wouldn't you agree?
Larry, I'd be interested to know what you thought about this explanation.
The problem with the explanation you mention SO, is that we have a corporate economy, not a market economy. By its very nature a corporate economy is statist and unless you are willing to abolish the whole kit and kaboodle, which few so-called libertarians are willing to do, it has to be regulated to protect the people from these same corporations. Regulation, and social democracy are the price you pay for the corporate state. If you want to get rid of these, get rid of corporate law, corporate welfare etc first. A situation where the corporations have free reign and the people no protection from them is a kind of neo-feudalism. But the right-wingers are the biggest free lunch gang in existence and that is what they want. The freedom to rob us blind and no way for us to protect ourselves. As for the explanation given by Annonymous and mentioned in Long's article, it is simply ridiculous, denial at its worst. (I am sure its propanants are also climate change deniers too.)
Anonymous,
I don't think many people in the generic libertarian tradition deny any state role in these kinds of crisis. My friend Chris Sciabarra wrote an article blaming both the state and nominally private finance industry. He's arguably more right then Larry in his origins as a fan of Ayn Rand, but the Marxian inspired radical left overlaps with the libertarian right on the question of corporate-state ties.
You can read his article below:
http://www.nyu.edu/projects/sciabarra/notablog/archives/001540.html
Fraud is a crime under Rothbardian libertarian law code too, so I am not so sure every CEO would get off easy on this. Although, it really does depend on your systemic analysis. Some Objectivists blamed business less then Rothbardians or mutualists.
Yep, my dad's job was arguably created by social democracy -- NLRB related stuff. My first favorite political columnist was a SF left-liberal of sorts named Mark Morford -- http://www.sfgate.com/columnists/morford/archive/
Interestingly enough, I didn't develop into somewhat of a teenage political "fanatic" until September 11th. After which I swiftly learned who the hell Osama Bin Laden was and various other sordid characters connected to U.S. foreign policy ( :
I discovered anarchism before USAian Libertarian ideology, so I didn't acquire much of a nuanced understanding of the history of free market theories until learning about the socialist-capitalist thought divide surrounding the term libertarian. Kevin Carson was instrumental in that.
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