Financial Crisis, Confidence, and a Decline in Our Way of Life
January 26, 2009 at 12:55 am
by: Joseph Marohl
Here are some words from Matthew Parris, gay British Conservative, in yesterday’s The Times (UK) on the present financial crisis:
“This recession is not a failure of market economics. It is a reassertion of market economics after a decade in which we paid ourselves more than we were producing, and funded it precariously and temporarily by complicated credit instruments that it took a while for the market to rumble. Now a prosperity that always baffled ordinary citizens has collapsed. The collapse of confidence is not irrational; it’s the correction to a long run of irrational confidence. All that stuff about the emerging Asian giants wasn’t just phrasemaking for party conference speeches. It was true. We’re falling behind. We face a mountain of debt: the difference between the life we are able to sustain and the life we were enjoying.
“Politicians cannot do much to jack up the first. So it falls to them to arrange and explain a reduction in the second. The great task facing the next British government is to help the country to recognise and embrace its fate: that we should get poorer, and slip with as good a grace as possible into the world’s second league. Yes, there is a rebalancing required: a rebalancing of popular expectation.”
Parris’s penchant for bile and outright hatefulness aside, and not so evident here besides, the column raises some pertinent points. The United States and the nations of Europe have not relied on productivity for some time. The idea of actually producing a product has been in decline since World War II. And, Parris points out elsewhere, it’s probably too late to turn back to industrialism and so, needless to say, much too late to return to agrarianism.
I suppose the reason we can not return to an economy based on productivity is that technology today has advanced to the point that inhuman technology can mass produce things more consistently and efficiently than human workers can—a circumstance that has relegated us humans to the role of consumers of what the machines produce for us (sometimes useful and wholesome, sometimes not).
Parris applauds India and China for thrusting ahead of the West in recent decades. In a world divided between venture capitalists with hedge funds and unskilled labor with desperate growling bellies, India with its rigid caste system and China with its totalitarian form of Confucianism have proved to have the traits evolutionarily favorable to survival. The Western democracies, with their quaint embrace of Enlightenment values like education, liberty, and equality and their Romantic obsession with individualism, humanism, and pleasure, have taken a serious fall on the course and can expect to be put out of their misery soon.
I suspect that Parris belongs to the set that blames the laziness of poor people and union members for the present decline. Lord knows, the upper classes have worn themselves out struggling to pull us up on our feet. And all we’ve done in return is clamor for even more liberties, decent health care, affordable living conditions, and equality for everyone. It must be awful for them. And when disaster strikes, they allow us 30 months to pull ourselves up to some measure of prosperity—and then the “free ride” of welfare and charity dries up. And, honestly, what more can they do? There are limits.
Responding to Parris’s column, Andrew Sullivan, British-born American little-c conservative, states on his blog this morning:
“I don’t understand why, after two decades of bubbling our way to phony prosperity through the dotcom chimera and the housing boom, it is somehow a ‘crisis’ that our standard of living is falling. It is surely a good thing that the standard of living is falling. It means that reality is beginning to return. A hangover may be painful but its cure is not a bout of more binging. My fundamental concern with the stimulus is that its spending be focused directly on real investment and immediate demand and that it be swiftly followed by a brutal assault on long-term entitlement and defense spending.
“We need to take a machete to social security and Medicare and a very sharp scalpel to all domestic discretionary spending. And we need to think very hard about big withdrawals of troops in Europe, Asia and the Middle East, and about the foreign aid we give Egypt and Israel. Between the boomers at home and the expanding, unending empire abroad, the next generation will have no sane fiscal future unless something is done very very soon.”
I agree. The standard of living should fall—though I might add that it’s in society’s interest to ensure a reasonable bottom. Unless we want cities of slums and even more burgeoning criminal networks and gangs, not to speak of the current “Mad Max” scenarios the American bourgeoisie is currently envisioning, we need to protect, as much as possible, those who have not yet achieved what we regard as an average standard of living.
To the extent that constraints on the poor and the wealthy ought to be fair, if not entirely equitable, I support what some (including Sullivan) demonize as “class warfare.” The prosperous should not continue to go unchecked in their pursuit of even greater prosperity.
I suspect there’s enough blubber on the thighs of CEOs of most mega-gigantic corporations to feed every assembly-line worker. If we can limit welfare moms to 30 months of benefits, we can probably afford to limit Presidential candidates to no more than two residences. Outcries against government restraints on liberties almost never extend to the benefit of poor workers.
It just seems more reasonable to me, if restraint is needed at all, and I would always insist on no unneeded restraints whatsoever, to restrain the powerful, rather than the powerless. To burden further the already powerless is, de facto, to give undeserved, unjust, and unconscionable immunity and privilege to the powerful.
January 26th, 2009 at 1:54 pm
The only way to ‘ensure a reasonable bottom’, would be to turn back the clock on decades of government intervention and regulation, as well infusions of money printed and backed by nothing i.e. bailouts. Because, unbelievably, there are people (a large portion of which are the Federal government) who believe and are trying to make you and I believe that our way out of this is to lend more money (created out of thin air) to people who are already buried in debt so that they can go out and buy more shit that they don’t need. The more we allow our government to operate as though money grows on trees, the more unreasonable the bottom will be.
The ‘hair of the dog that bit you’ mentality that flows throughout Washington leaves the elite (mainly bankers & friends) drunk on the backs of the American taxpayer, born and unborn.
“To burden further the already powerless is, de facto, to give undeserved, unjust, and unconscionable immunity and privilege to the powerful.”
Sound money and an end to the Federal Reserve would be an excellent start.
What other solutions do you purpose?
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January 26th, 2009 at 3:03 pm
Wish I had some solutions ready at hand. Don’t, though. And of course stating my hopes and aims would not actually be a solution either. Everything you mention sounds right by me. The question is how do we get there from here? And what do we sacrifice on the way? False values and unrealistic life styles (standard of living issues) should be the first to go, needless to say.
But of course all our false needs are tied to real needs now–a hundred years ago we didn’t “need” automobiles, but the automobile has been so successfully sold to us that we’ve redesigned our cities and closed down our streetcars lines, so that what was once a luxury for Sunday joy rides is an absolute necessity for working and putting bread on the table. So more fundamental (and radical) than finding cheap fuel for our cars would be to re-design our cities and workplaces, etc., (i.e. our standards of living) to human scale. Easier said than done (like all solutions), but that seems to me like something the powers that be should look into.
My concern is also that the well off are not only going to land on their feet but also going to get extra cushions, unavailable to the working poor, the incapacitated, and us regular folk. I could be mistaken in that. And, the thing is, I wouldn’t mind if the rich were bringing their own cushions, but they’ve got the balls to demand the rest of us put up for them … even provide them with cushions they don’t ever intend to use, just saving up for a rainy day, perhaps. The middle class, always with its nose up the asses of the rich, will give it to them too–and begrudge the poor men and women who dare claim an equal right to those cushions.
I don’t accept India’s and China’s exploitation of unskilled labor as a viable solution. Slavery by another name. A polarized society of extreme privilege and extreme destitution may be what would benefit the economy, keep it going, but that’s fucked-up, and such an economy is fucked-up–and such an economy has no right to continue (I paraphrase Jefferson, I think). We made the economy; perhaps we can make something to replace it. I just can’t see the sense in any company’s CEO making a 1000 times more than its lowest paid worker. That, to me, is the epitome of arrogance and superfluity.
I’ll give up my gadgets and tchotchkes and whatnot, even my 40 hr work weeks and weekends, if doing so would keep my neighbors going. But I’m less inclined to make such sacrifices if the beneficiaries are GM, Wall Street, Halliburton, and Bank of America.
Sound money sounds good too, though like all values, monetary value is mainly symbolic–if nobody wants them or needs them, even gold and silver are junk (I cite Thomas More’s Utopia). Money is what money does–sort of like Handsome is what handsome does. For all I know, Elvis memorabilia will be the hard currency of the future.
I don’t expect to be satisfied–but I do hope it’s not just because I’m impossible to please. I’d like to see the big box stores tumble down–along with the overblown corporations–replaced by mom-and-pop, or mom-and-mom, or pop-and-pop-and-mom ventures. Life on a human scale is what I long for, but, again, how do we get there?
I ramble. Too many things need fixing. I can be satisfied if even just a few of them do get fixed. Not overjoyed, but satisfied.
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January 26th, 2009 at 9:41 pm
The problem is that though many people would give up their gadgetry and what-nots for the good of their communities; would pitch in to make sure people are fed and have shelter and so on- this is not true of the institutions and bankers within that have received hundreds of billions of tax dollars from those who have not even made it to an embryonic state of being.
This makes it difficult, as you state yourself, for average Americans to understand why they should become further enslaved and have their wealth devalued for the sake of the too big to fail.
Who should set the tone? Big government has been setting the tone of how to conduct business now for much too long. And look around, Timothy Geithner was just sworn in as Treasury Secretary. It doesn’t appear that Wall Street will be sacrificing anything any time soon. Goldman Sachs? Citi Group? $80,000 area rugs and a 50 billion dollar coporate jet?
We’re down to one automoblie, we gave up our cell phones and satellite dish many months ago. I could not tell you the last purchase I made that wasn’t an absolute necessity. Movies, dinner out of the house? Not in over a year. Barely pulling it off within our means, not sure how much more I can sacrifice.
And so tell me why a Starbucks commercial should spur me to give my time for Obama’s cause for service when he doesn’t even flinch at appointing a tax fraud to be in charge of our tax dollars?
We’re supposed to lay down our arms and surrender to the idea of ‘change’ as though it were some higher calling, and yet the corruption and business as usual continue.
Just keep swimming
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January 26th, 2009 at 11:34 pm
Like you, I distrust the bailout and have criticized it–am criticizing it even now. Still, I think Bush’s wars and the evisceration of privacy and human rights have done more harm to our nation than the bailout ever will–but, still, that’s not an endorsement of the bailout. (I don’t think Bush is solely to blame for everything that’s wrong with America–but for now he’ll certainly do as a poster child for everything that’s wrong with America.) I think the bailout will make matters worse because I don’t believe trickle-down economics works–as I said, I think economic protection of the rich and powerful will not, as the reigning mythology goes, help out the rest of us. It never has, because rich and powerful people tend to care only about their own wealth and power. I don’t trust free markets either, for the same reason. Quite frankly, and perhaps rather bizarrely, I don’t trust economics–or demographics, or statistics–you can blame a bad math teacher in my past, no doubt. I simply don’t think anything I value in humanity is quantifiable–or even manageable–or explainable on pie charts.
I voted for Obama, but that doesn’t mean I can’t and don’t criticize the man. I’d vote for him again, given the opportunity. He’s more conservative than I’d like him to be–and he’s a politician–a breed of human I have no empathy for whatsoever, from US Presidents down to high-school Sr Class VPs. But politicians seem to come with politics. Obama is no worse than the last 8 or 9 Presidents we’ve had, and promises to be considerably better than 7 of them. He will do nothing, I suspect, to diminish the expanding powers of the Presidency, which have been stretching past its Constitutional limits since Lincoln, at least. I will be surprised if he makes any headway in solving the current economic mess … and in the unlikely event that things improve in the next four years, it’s more likely to be the result of chance than any given policy.
I don’t think he’s out to cripple the nation … not intentionally … but of course I could be wrong about that. I don’t see community service as exclusively “Obama’s cause,” but I do understand having a certain measure of distrust for that appeal–the call to pull ourselves up by our bootstraps, and to pitch in for the good of the team, is very frequently an open audition for dupes–while the rich and powerful collect prizes and honors for coming up with the brilliant idea of asking poor people to work harder for less pay–if not for free.
In everything I write, it’s fairly easy to detect my distrust, my detestation, of wealth and power (pure jealousy, perhaps … I don’t know … but the bias is my cross to bear). I also have a strong distaste for appeals to family and God and patriotism–all my experience of such appeals suggests that they are effectively, if not inherently, fascistic in their demands for group-think and utter dependence on feeling over evidence. Obama represents all these things–as almost every US politician must. We are a child- and flag-worshipping culture, on the verge of worshipping fetuses and flag pins, as well.
More than anything, we are a culture that worships money, which is why we cater to the whims of the wealthy. We chose our leaders from among the wealthy … and specifically favor those adept at fund-raising and amassing endorsements from other wealthy, powerful people. If we’re good to the wealthy, we believe, they’ll be good to us. Putting any kind of legal restraints on wealth is anathema to those who have no qualms about legal restraints on natural bodily urges. On some level, most of us, like Joe the Plumber, imagine ourselves on the verge of having great wealth and spend a good amount of time daydreaming about how to spend our first million and what to buy our pal George Clooney for his birthday. The thought that our income over $250,000 could be subject to special (higher) tax rates or that our children will be forced to pay extra taxes on the $3,000,000 we plan to leave them appalls us. On the other hand, we suspect that poor people are sneaky, lazy, irresponsible, mendacious, and bilious–in short, every quality history shows us as typically belonging to the very rich.
The current economic crisis strikes us as very dire … direr than a senseless war in Iraq, costing thousands of lives, ever struck us … direr than AIDS … direr than having a higher percentage of our citizens in prison than any other non-totalitarian nation … direr than the threat of or our complicity in global warming. Something about money strikes to the core of the American people. More people are sweating over the coming depression than ever sweated over the melting polar ice caps. So the crumbling economy catches our attention in a way that crumbling communities do not. What can I say to that?
Not much. I can’t even say I am truly appalled, because I am part of that culture, and everything I just described strikes me as normal and understandable. Perhaps even to some degree acceptable. And despite having no confidence in the effectiveness or morality of bailing out American banks and the auto industry–two dinosaurs we should be considering phasing out anyway–a part of me understands (though hardly accepts) the pleading hope that Providence will look down on this offering to the nation’s upper 1 percent and let us keep our jobs (even the ones we hate), our homes, and our current standard of living.
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January 27th, 2009 at 12:06 am
I agree with most everything you’ve stated above, Joe, except of course on matters of the free market. But, it’s fair to say at this point we may never again see the likes of a free market.
The rest, we can chalk up to a disease or malfunction of some kind- one that I hope will eventually be eradicated through evolution. Homo sapien is certainly despicable.
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