through the implosion, tv set by tv set

LI is back. We come back minus one tooth (about which, more on another post) from a trip that consisted mostly of following my friend M. around Mexico City and playing circus with her daughter and protect the castle with her son – although protect the castle is a complicated game of which the rules change to the extent that it isn’t clear what the castle is, as J. decides which miniature bowling pin stands for the king or the queen, which pile of books, toys, and odds and ends makes up the battlements, and how to deal with the collateral damage that ensues when he dances around the room, jumps on the bed, yells yippee, and generally makes a ruckus when the silver ball I toss at the castle misses the king, the queen, and all nine knights. Let it not be said that we lacked for intellectual content, down there in DEF. Plus we read a lot of Proust and took notes, all for The Human Limit, which we so hope our few remaining readers have not totally forgotten. Oh, and in our own little person, we proved that the global war on terrorism is a hoax. Maybe that will be in another post too. Suffice it to say, we spent some time at the U.S. embassy to Mexico, being gaped at by various embassy employees.

And David Foster Wallace hung himself.

We came back through the implosion. We knew, even in D.E.F, that the implosion was coming last week, when we read in the NYT about Lehman’s flood of red ink. Although of course – and this is the beauty of a blog! – we have been writing off and on since the Fed first fatally sought to shore up, of all things, the equity markets back in August, that the implosion was coming closer, with tremendous strides, like some personified sin in Pigrim’s Progress. In the Mexico City airport, we picked up the Financial Times to get the score, so to speak, for the day’s gladiatorial contest. In Dallas, we watched CNN. CNN is like a video i.v. of pure gibberish. It is like mindmelding with an overflowing garbage can. The lies and factoids pouring out of the tv were rather astonishing. We especially liked it that – of all people – Alan Greenspan was reverently quoted for his opinion of the implosion. For in the CNN universe, the characters of the celebrities are unchanging archetypes, and Alan Greenspan is still the maestro, instead of the Ayn Rand's revenge on American capitalism.

There were also clips of Obama and McCain, and not one word about what this is. It isn’t a credit crisis. It isn’t a liquidity crisis. This is an inequality crisis. The massive increase in the inequality between the wealth of the working and middle class and the upper class is the sole perpetrator of today’s implosion, and of tomorrow’s implosion too. You can’t run a consumer economy on extended credit and frozen wages. You can’t trade the residual. You can’t make the financial sector, of all sectors, the engine of the economy – unless your economy is as small as Holland’s. As the government transfers appalling hundreds of billions to the plutocrats and assures the CNN viewing audience that it is for the good of all, the spectator must wonder if the servility of the general population, its inertia, its ignorance, its general incapacity to chew gum and walk, will allow this, too, to pass. So far, it does look like the hugest robbery in history will proceed without a hitch, and with no suspense, even. Why dress all in black and map out the sensors that guard the vault of Fort Knox when the treasury secretary gives you a key and your own gilded wheelbarrow?


Chuckie K said…
What a quandary you have posed me. Less than four hours have passed since you posted. I would like to wlecome you back, but doesn't this haste risk suggesting some unseemly sycophancy? Ah well, let it not be said I am risk-averse, like some corporate lawyer.

Welcome back.

And Fannie and Freddie. $5.4 trill in portfolio. So $100 bill in assurances buys nothing but a decimal point in the precipitant of the impending crash. This one could be great to tell the grandkids about, "We had electricity. Every day, all day. No really. We did."
winn said…
yay for being back! I played a game like castle myself, when I was wee.

You mean Greenspan is not a god among men?! My television lies to me!

It's a good thing you didn't watch CNBC. They were totally calm about all of this. Almost, dare I say it, medicatedly calm.
P.M.Lawrence said…
This post at John Quiggin's blog is apposite (here is my own comment there).
roger said…
mr. CK, thanks - I think! - for missing me.

Winn, you were on a hot streak while I was in Mexico, it looks like. People should defintely read the ever Winnish take on War and Peace here - although I would like to hear more about what you think of Tolstoy's notions about history. I find them quite interesting.

And Mr. Lawrence, I read Quiggins post on Crooked Timber. He seems to have been satisfied by the explanation provided by Peter Schaeffer:

"In the comments to my last post, reader Peter Schaeffer provides exactly what I asked for: a breakdown of the discrepancy between 30 per cent growth in US household income over the last 40 years and 117 per cent growth in income per person. In addition to the factors I’d mentioned (falling household size and growing inequality) Schaeffer notes two more: the fact that GDP has grown faster than national income and the fact that prices faced by households (the CPI-U-RS) have risen faster than the GDP deflator. He provides the details to show that this fully explains the discrepancy."

I might be totally wrong, here, but I think Schaeffer's explanation works. You don't? Could you tell me why? In my opinion, Schaeffer's answer shows, among other things, that inflation is being underestimated - and that makes sense to me.
P.M.Lawrence said…
Huh? Where did you get the idea that I disagree? I merely provided links to other people's work and comments in the area. I think those additionally show that the lower US quintiles have actually gone back and that the main gainer group is so small that you cannot plausibly suppose that movement between groups makes a material difference to most people's lives. But none of that is my direct view and none of it contradicts the description of how the statistics are working out.
roger said…
Mr. Lawrence, I'm not such a contrary fellow! I just wanted to know what you thought of that explanation. Sometimes, a question is just a question - it isn't an aggressive ploy. Why do people think I'm such an arguer? My brothers do too. Hmm.
P.M.Lawrence said…
Think of Latin, with its three forms of question, num expecting the answer "no", nonne expecting the answer "yes", and the neutral interrogative verb suffix -ne with no expectation of an answer.

Your questions were a lead in of the num sort expecting the answer "no, I don't agree", followed by a supplementary enquiring why I disagree. In point of fact I am inclined on a superficial reading to agree, but I simply haven't given it enough attention to do more than that.