CHANNEL SURFING THROUGH THE REVOLUTION

Over the last eight years, LI has developed a pretty fierce hatred for the Left. We break out in hives whenever we hear some grave person intone about the Left should do this or the Left should do that. As if the Left were anything but a miserable con game, one hundred fifty years of murder and disaster under its belt, led by young romantic young men who turn into old horrors as soon as they get a chance to mismanage an organization. The convergence of Mao and Milton Friedman in China has been a beautiful symbol of what the “left” is all about. That former Leftists loved the invasion of Iraq is not only not a surprise, but the secret face of the Left all along.

But as the “Left” exploded, I was hoping, romantic to the end, that something would take its place. In 2000, I even stupidly thought that thing would be the anti-corporation movement, which crystallized at the time around Ralph Nader. Nader, of course, had a more than honorable career in the seventies. Unfortunately, the only thing politician-like about Nader is his blind, gargantuan ego. The anti-corporation movement seemed to dissolve when it was needed most – after 9/11 – and now consists of a painfully unfunny clown act that comes out every four years and runs for president.

The run up to the current disaster was predictable since last summer. The “Left” of course saw, heard and said nothing – which is par for the course. We are now entering perhaps the most revolutionary period in my lifetime. It is rather hilarious that the “Left” will hop, skip and jump through this period without even the slightest flicker of recognition. Naturally, however, they will be like white on rice over the next superhero movie. The subtexts of Iron Man2! Does that Batman movie have a subversive countertext underneath its reactionary overtext? I’m just on the edge of my seat...

In the UK, where the “left” became the third way, the destruction of the latest and the greatest scheme to enrich the upper class – our thirty year old system of financial fictions – is probably going to wash away the Labour party. Is this good or bad? After all, the Labour party labored, mostly, to convince people that it was a behemoth Maggie Thatcher with a human face. My theory has long been that the takeover of old blue chip corporations by LBOs was the model for what happened to the “left” parties – they were cheap, they were exhausted, and they were beautifully positioned to fulfill a corporationist agenda by providing faux opposition and real support for the system of massive inequality, the hollowing out of democracy, and the use of pr warmongering as a sort of bread and circuses, that the fat cats love.

The U.S. has no left. Perhaps this will be an advantage. So far, there hasn’t been a peep about the insane policy being announced in headline after headline, as the Fed systematically destroys the ability of the government to help the producers – the bottom 85 percent. But I – romantically – believe that the doggies aren’t going to eat this dogfood much longer. The doggies will bite.

the topdown solution to the crisis is AN UTTER CATASTROPHE

I hear the roar of big machines
Two worlds and in between
Love lost, fire at will
Dum-dum bullets and shoot to kill, I hear
Dive, bombers, and
Empire down
Empire down


The economists, pundits and our elite have patted themselves on the back for the past year about “handling” the “credit” crisis. They have handled it by pouring money into the pockets of the top earners, who are, not coincidentally, the people who run the financial sector. Manufacturers in this country – GE, GM – have, for a long time, gotten in on the racket by manufacturing financial centers themselves.

Was there a better way?
How about: bottom up financing?

A clever commentator over at Mark Thoma’s Economist’s view named James Kroeger has been pounding on this idea for a while. He put it very succinctly before, once again, the Fed took another step into the quagmire. I have to quote him:

Let's go through this a step at a time... How would the Average American be hurt by a complete collapse of the financial sector of the economy? The answer is that he/she would be hurting only if aggregate demand were drop as a consequence of banks lending less money and businesses spending less money. Without intervention by Congress, businesses that are too heavily leveraged would go out of business and many people would lose their jobs. But if the federal government were to increase its spending enough (by taxing the rich and spending that money on infrastructure & human capital) aggregate demand could not only be maintained, we could also easily increase AD if that is what we wanted to do.

To maintain aggregate demand at the levels we desire, it might be desirable for Congress to create taxpayer-owned banks that would buy up the assests of failed private banks at fire-sale prices, fully capitalize them with public funds, and then provide whatever loanable funds might be desired by borrowers. If loan demand is inadequate to maintain aggregate spending at the desired level, then Congress can simply spend more money on public investment.

So what's the problem? What's the horror? The evil geniuses who created our private financial markets would suffer massive losses because they did not prepare themselves for excessive risk. They would lose Big Time, as they should. Within a month of two after such institutions fail, the government could be replacing them with publicly owned entities that have no reservations whatsoever about lending to would-be borrowers.

It would all be over within 6 months and very few people would be unemployed while competing firms buy up the assets of failed firms. As long as demand is strong, everyone would be working and pumping money into the economy at the same time that the few remaining players in the privately-owned financial sector are finding new ways to make a living while competing with The Taxpayer's Bank (one that is not interested in maximizing profits while taking on risks that everyone else must pay for, but only in serving the public interest) and which writes the rules that they must abide by.
(If a reminder is necessary: the Great Depression continued on as long as it did for only one reason: the Federal Government did not spend enough money to eliminate unemployment until World War II began and then unemployment dried up almost over night. Roosevelt's Congress did not authorize enough spending because too many members of the opposition and of the banking community warned that the consequences of 'inflating' the economy would be disastrous. Too bad they listened. Millions of people suffered terribly for no good reason.)

This is an awesome suggestion. It will be completely ignored by all parties and all people in power. But LI suggests that readers intrude this idea into forums where the economy is being discussed at present – q and a on the Washington Post or the NYT, comments on any popular political site, etc. At the moment, the top down, top benefits most model is the only model on display. It is late. That model is a failure. And it may well lead to the complete failure of a perfectly good economic system. The naughties have been an experiment in how-stupid-can-we-be. It looks like we will drain the betise to the dregs. But we don’t have to. We have a choice.

some will rob you with a six gun, some with a fountain pen

In the new Feudalism, we have to have a set of new euphemisms. So when a government agency simply abandons the law of the land – otherwise known as breaking the law – we have to find a gentle, doe eyed way of describing it. And who is better at the task than our faithful scribes and minions, the same people who transformed the Great Fly’s war of aggression in Iraq into a crusade for democracy? Who can put the human face on predator capitalism better than the NYT? Thus we get explanations like this one, about the use of taxpayer money to support private peculators:

“Until this week, it would have been unthinkable for the Federal Reserve to bail out an insurance company, and A.I.G.’s request for help from the Fed of just a few days ago was rebuffed.

But with the prospect of a giant bankruptcy looming — one with unpredictable consequences for the world financial system — the Fed abandoned precedent and agreed to let the money flow.”

Abandoned precedent. Let the money flow. Such beautiful terms! It makes for a whole new way of describing things. For instance, on one could say that on November 9, 1932, Clyde Barrow abandoned precedent in Lagrange, Texas, and let the money flow from the Carmen State Bank. Doesn’t that sound nice? Clyde prompted the money with the use of a pistol. We are more civilized now. Bernanke used a pen. We don’t use vulgar words of language.

Which reminds me of this Woody Guthrie song.

orderliness

Since last August, economic policy in the U.S. has advanced under the banner of orderliness. The Fed, the Treasury, and all of the Great Fly’s horses and all of the Great Fly’s men are making sure that the unwinding is orderly. What does this mean? Well, it means that the New Deal is inversed. The old New Deal was about spending money to employ the unemployed. The New New Deal is about transferring money to plutocrats. Now, yesterday we had one outcome – an easily foreseen outcome – of what an “orderly” unwinding means: bankruptcies of the banks, freezing up of credit for consumers, inflation on all fronts, a steady increase in unemployment (which is, as we all know, grossly undercounted) – and money, massive amounts of money, for the rich. As you can see, that outcome is much to be preferred to a disorderly unwinding. The latter would involve bankruptcies of banks, freezing up of credit for consumers, inflation on all fronts, a steady increase in unemployment – and no extra money for the rich! That would be terrible.

What amazes LI is how inefficient the new feudalism is. I have a small but, I think, moneysaving suggestion to make to our masters in D.C.: we can cut the time and distance money has to travel between being collected by the IRS and landing in the pockets of bankers by setting up an office that directly assigns revenues to the wealthy. Thus, for instance, the Republican head of Merril Lynch, John A. Thain, who apparently earned a truly pitiable sum (25 million dollars) for presiding over the ruin of that bank for ten months, ould simply be assigned all the revenue collected from, say, Kentucky. Because we are a fiery Republic, Dedicated to Liberty and Opportunity, we should not knight him. No, we should scorn to ennoble him. Although our population is a spineless, servile, bullying, infantile, and media lobotomized bunch of hicks, still, we are too proud to allow our masters to assume titles like Earl of Hampton. But we can call them things like Super Entrepreneur of Hampton. This will warm our country hearts, and he could be interviewed on tv, or, as we like to say, reality land, dispensing wisdom that we can all sway to in our huts.

It looked, at one point, like the Dems – leaning towards their communistic roots – might have even suggested that instead of an orderly unwinding, we try the disorderly variety, in which you actually shove the Federal money at the masses. Imagine! The disorder of that would make our news storytellers on tv wring their toupees and bouffants. They would be so sad! It would be sheer demagogy! And against the free market and everything! Luckily, that moment has well passed, and we can all get behind the orderly unwinding. Of course, the Dems may be communists, but luckily they aren’t so communistic as to suggest that maybe, the government, instead of loaning banks 30 billion dollars here and 100 billion dollars there at 2 percent interest so that they can loan the money back to the U.S. at 2.5 percent interest, should just loan to the population at large at 2 percent interest, because, as we can easily see, that would be disorderly. We must be orderly. And at the end of this happy, happy time, there might be some money to, well, I don’t know, build another war or something. We do so love a war!

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?

the newest fade

Lenin claimed that the state would fade away in a society that achieved true communism. LI can’t say that we’ve achieved true communism, yet, but we are fading away – at least for a week or two. Fading to Mexico, through the storms we ride. So you will have to untie the intricate knots of the eighteenth century without me! My last posts, heavy with heaviness, like my Mozart posts, light with lightness, are the endpoints of the campaign. And I so wanted to get to external and internal voices, privacy, love, and the language of cats!

Well, you will just have to figure that out without me.

Lights out.

Weekend: the week in politics!

Of course, LI is getting tons of emails about our relative silence vis a vis the late breaking political developments. The convention. The crucial question of leadership and experience. The whole gender thing.

We are speaking, of course, of the PS conference at La Rochelle, and whether Ségolène Royal or the mayor of Paris, Bertrand Delanoë, take over the spot of first secretary of the party. Our heart is with Delanoë. We like the idea of confrontation, of getting in the face of the reactionaries in power. We dislike Royal’s idea that the PS has to extend peace feelers to the MoDem, of all feeble front organizations for a toothfairy solution to social problems. The dream of the Third Way should, by this time, have revealed itself clearly as the same old nightmare from which we are all trying to wake up. On the other hand, I like Royal as the face of the party. She did resurrect the corpse, which was shot by Jospin and his Blairing around ways. So, at the moment, I think Delanoë’s confrontational strategy will work better in an election year than as a 24/7 offyear theme. In fact, what I’d like to see is an agreement between the two – Delanoë agreeing to serve as party secretary, in return for supporting Royal for one more try at the presidential. As for the perpetual bickering of the party elite – well, it is an old story, and for reasons that escape me, the journalists always cover it as though it were some kind of disaster.

“A trois semaines de la date-limite pour le dépôt des motions [at the congress of Rheims], qui départageront les prétendants à la succession de François Hollande, l'heure était aux grandes manoeuvres pour Ségolène Royal, Bertrand Delanoë, Martine Aubry ou Pierre Moscovici. Objectif: constituer une majorité dans un parti balkanisé. Au sortir de l'université d'été, la situation n'est pas plus claire. Aucun des prétendants ne paraît pour l'instant en mesure de réunir plus du quart du parti lors du vote sur les motions.
A ce petit jeu, Ségolène Royal se sera montrée la plus discrète. La finaliste de l'élection présidentielle de 2007, qui mise tout sur son aura parmi les militants, s'est contentée d'une apparition le premier jour, marquée par un appel quasi-mystique à "l'amour" entre socialistes et une rapide réunion de ses partisans. Samedi et dimanche, elle a préféré à La Rochelle la fête du Parti démocrate italien.”


Then, of course, there is the most popular socialist, Dominique Strauss-Kahn, with his pion, Moscovi. The French love to express their preference for the Colbert type in polls – not the comedian, the treasurer – but they vote for Louis xiv types.

Okay, so that is the roundup. Amie will no doubt have to correct me if this is a misanalysis. Oh, and ... I hear that something is happening in the U.S.A. too. I haven’t been paying attention. Who are the candidates again?