The aspect of the current financial upheavel I find most thought-provoking isn't, as Ann Pettifor points out, that free-market institutions who scoff at the notion of state intervention in sacred cash cows - like, say, health care - are currently on life support thanks to governmental reserve spending - this kind of Monopoly-money hypocrisy on the part of business is hardly new ("oops, I ran out of money Mr. Banker - let me have some more!").
What's astonishing (especially when watching it in action) is the level of groupthink, overt and covert, being perpetuated by anybody and everybody involved in market institutions - bankers, traders, inverstement analysts, and crucially, business reporters - desperately attempting to convince the public of the transitory, minor, perfectly reasonable nature of the crisis.
Groupthink's not new, but I wish that when billions of dollars and the direct and indirect livelyhoods of billions are at stake, a little analysis might win the day. For instance, it seems clear that if millions of people don't have enough money to pay the debts their debtors knowingly bestowed on them, it's going to be a problem - just as it seems equally clear that if a society (species?) uses up the physical resources of a planet at an unsustainable rate, the result isn't going to be children's feeding time at the Boise County Zoo - or rather, not in the way one would like to think.
I do wonder how much of the opinion-setting is conscious. Does Jim Flaherty really have any base in his perspective on reality to say, for instance, that Canadian household savings are "very strong" - when they're at their lowest level since the 1920s?
It's remarkable how effective the perpetuation and propagation of this sort of mass belief can actually be. Unless confronted by cold hard physical facts (like having no cash on hand to pay the cleaning lady), people will plow ahead believing all sorts of bosh. The convincingly smooth platitudes of a thousand (self-serving? surely not) financial managers may convince everybody that the show can, and will go on.
Except that there are still all those people out there with no money to pay their mortgages. And to paraphrase Bill Clinton, when push comes to shove "it's the money, stupid."
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1 comment:
I missed you.
As for Flaherty: well, what else happens? I think such bland un-truisms are what politicians spout to reassure people not to pay attention. I started liking football because I couldn't believe Noam Chomsky when he asserted that it was only a tool of the elites to distract the masses from things that matter, like, say, the goings on in East Timor. I see my Ticats remain at 1-6.
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