Motley Moose – Archive

Since 2008 – Progress Through Politics

Enough already

The financial markets are again getting pummeled, both domestically and globally; the nearly $800 billion stimulus package signed with fanfare by President Obama has done little to alter the mood. In fact, if you read through financial websites and assorted blogs on politics, economics, or anything related to those, you will find a nearly endless sea of misery. The level of anger, pessimism, despair, and sheer hopelessness seems to reach new peaks every week, in inverse relation to the movement of global equity prices and the size of individual retirement accounts.

It’s been said but bears repeating: global economic activity fell off a cliff after October last year, and has remained there. The implosion of the credit system, built as it was on the flimsiest of foundations, layered as it was onto a few million sub-prime mortgages of homes predominantly in Arizona, Nevada, Florida, and California, led to a near halt of buying, spending, and investing.

But bad fundamentals are only one aspect of what is going on. What makes the present that much worse is a complete meltdown of confidence about the very possibility of a more balanced future. And it’s not just an erosion of confidence. It’s the flourishing of our destructive instincts, the opposite of the “better angels of our nature,” the demons, the whispers in the night that all is about to go up in flames.

We all have our fears, whether we admit them or not. But this has gone too far. In the financial world, there is a game of one-upmanship to find more dire adjectives, and any who dissent and suggest that yes, there will be a tomorrow and yes, there will be a future of growth, moderate and different, but still motion forward and movement upward, they are treated with contempt, not barely disguised, no: contempt on the order of those made to walk the streets during the Cultural Revolution with dunce caps and signs of shame around their necks.

Those who bet that the market will go down until there’s nothing left to lose, who are convinced that value will be permanently wiped out – the shorts and the traders – they are enjoying their moment in the sun, and some are undoubtedly profiting from the collective misery. There’s nothing wrong with that in small doses, and almost everyone can benefit from hedging their bets in the market. But you can’t be short forever, and you can’t ultimately profit from everything going down. A few can make money for a while, and if you believe that it’s all survival of the fittest, then you probably don’t care if 99% suffer as long as you’re part of the 1% that prosper. The sheer delight in “burn, baby, burn” is hardly unique to our age. We’ve been there before, and it leads nowhere, except to a whole world in flames.

So yes, millions are losing their jobs and their homes and we are struggling to figure out what is real and what was fueled by debt dreams. And yet, there isn’t mass starvation, mass homelessness, imminent physical danger, certainly not in those parts of the world that are suffering the most from this credit crisis – the United States, Europe, Japan. The fears and hysteria are based on more intangible issues, though the fear of total loss of home and livelihood and health is just as intense.

While we need to respect that this is a pivotal moment for us all, we also need to halt this pernicious slide into unrelenting negativism. We need to say “enough already,” and recognize that we are hardly the first generation to face challenges, and that a dysfunctional financial system is not of the same order as war, pestilence, and social chaos. The economy contracting by 4% or 5% for a few months is a shock, but it is not an excuse for announcing our collective obituary, unless, of course, we want to dance on the abyss and court disaster.

So, enough already. Our problems are real; but we are pulling ourselves into a vortex of gloom as powerful and destructive as our one-time belief in our endless capacity for reinvention was powerful and constructive. We can make this better, or we can make it worse. It’s a choice, not a destiny.

For a look at additional blogs and other writings of mine, feel free to visit River Twice Research.


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/ 4 Comments

4 comments

  1. HappyinVT

    (my mom grew up in Germany during the Depression so I can only imagine what her formative years were like) but this is the first time I’ve gone through it and I’m trying very hard not to be scared to death.

    I work for a newspaper that, while the parent company itself is doing better than most, has seen a circulation drop of about 25% and we don’t have a large circulation to start with.  The job I went to school for, teaching, isn’t much more stable than the newspaper business.  There isn’t much hiring going on in my area and I’m my sole supporter.  Unless I can figure out how to put the kitties to work.  I have enough savings to last about five months and can’t afford to add much to it right now.

    If I lose my job I’m screwed.  Am I as bad off as a lot of other people?  No.  But, depending on what happens in the next few months that distinction may change.

    But, I have hope.  (Couldn’t get out of bed without it.)

  2. John Allen

    Sure, there are some who think this is going to get much worse before it gets better, but there are more who say it will turn up in a few quarters or a year or two at most. Some people are worried about their jobs, probably rightly so, like people in home construction or the auto industry, however others are in recession-proof industries and aren’t all that worried about things. Anyone with a tiny bit of historical knowledge knows this is one of a long string of recessions and depressions the world economy has faced. They all ended and this one will too. Eventually. The question is whether we can shorten the recovery time and how we can soften the blow for those who will be hurt.

  3. anna shane

    or as Krugman says, Yikes!

    This is a big wake up call for those of us who think our leaders know more than most and are wise enough to avoid catastrophe, at least for themselves.  Whether or no you’ve lost big in the market, this economy is hurting all of us, we’re in it together.

    A few years ago I was on a plane sitting next to a French businessman, who claimed that Europe was no longer tied to the US, and could manage even if we failed. Well, that’s wrong.  We’re bad off, elsewhere is worse off, go figure.

    We have our politicians and our world leaders, but the guys running things are our international businessmen (and a token woman or two). They control the money, and we get the crumbs.  We cant all be rich together, but seems we can all get poor (or poorer) together.

    The point is that no one knows how it can be propped back up, and in Japan they stopped spending, and started saving, but when savings are worthless, how’s that to help?

    I think we’re probably all dancing on the Titanic, that this will get much worse, and last a very long time, and not everyone will dig themselves out.  

    My hope is China, Hillary was there and made some very practical choices, like putting human rights on the back burner and suggesting they keep lending to us, so we can recover and buy their stuff again.  But, the Chinese are building a market at home, and how?

    Well, they’ll get universal single payer health coverage, so their citizens won’t feel the need to save for medical catastrophe.   they’re educating their kids and soon all education will be free in China. they have more engineers, physicians, economists, builders, and they keep educating and training more.

    If you have a place to live, food, education and health care, you can have a life.  If the state helps in those areas, we can all have a life.  That’s what China is providing, so that what people earn doesn’t have to all be saved for a rainy day, it can be spent, and passed around, to create wealth. That’s how it’s done.  

  4. Chris Blask

    In the eighties we were all told we would need to learn Japanese to survive the Bleak Future, today we’re told we will have to learn Chinese.  (During the seventies it was clear to anyone with a brain that the global economy would grind to a permanent halt followed by an all-out nuclear exchange… ;~)

    While there is no guarantee that the US will always remain the global economic leader it is today, there doesn’t seem any reason to foresee the demise of the global capitalist economy or US leadership of it in coming decades.

    Not meaning any disrespect, Anna, but I believe America doesn’t need to become more Chinese to survive anymore than we need to become more Swedish.

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