archive › economics
Don’t Just Do Something, Talk
Slavoj Žižek in the London Review of Books:
One of the most striking things about the reaction to the current financial meltdown is that, as one of the participants put it: ‘No one really knows what to do.’ The reason is that expectations are part of the game: how the market reacts to a particular intervention depends not only on how much bankers and traders trust the interventions, but even more on how much they think others will trust them. Keynes compared the stock market to a competition in which the participants have to pick several pretty girls from a hundred photographs: ‘It is not a case of choosing those which, to the best of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligence to anticipating what average opinion expects the average opinion to be.‘ We are forced to make choices without having the knowledge that would enable us to make them; or, as John Gray has put it: ‘We are forced to live as if we were free.’
(Via 3 Quarks Daily.)
The New Socialism
Matthew Yglesias:
Over the past 30-35 years or so, the world as a whole has retreated from the high tide of state management of the economy that was reached around midcentury, and moved more in the direction of laissez faire. But I think it’s fair to say that though the trend has been perfectly general, the political leadership in this movement has tended to come from Washington and London, where Ronald Reagan and Margaret Thatcher were the loudest and clearest exponents of it and their successors on the center-left tended to confirm, rather than reverse, a new Anglophone consensus. And yet:
The British and American plans, though far from identical, have two common elements according to officials: injection of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans. […] The Treasury’s openness to direct infusions of cash is a remarkable change in tone from a few weeks ago, when the Treasury secretary, Henry M. Paulson Jr., and the Federal Reserve chairman, Ben S. Bernanke, discouraged such actions in testimony before Congress. “Putting capital in institutions is about failure,” Mr. Paulson declared on Sept. 23. “This is about success.”
This is what a lot of left-of-center economists said in the first place, but the ideological taboo against nationalization was very strong. Now, though, the forces of looming collapse in the banking sector are proving even stronger. Thus, it looks like it’ll be George W. Bush, Hank Paulson, and Ben Bernanke who bring a very strong dose of socialism to the United States of America. And yet Andy McCarthy’s busy worrying if Barack Obama is a closet Maoist.
The Economics of Fascism
Wikipedia on The Economics of Fascism:
Fascism also operated from a Social Darwinist view of human relations. Their aim was to promote “superior” individuals and weed out the weak.[15] In terms of economic practice, this meant promoting the interests of successful businessmen while destroying trade unions and other organizations of the working class.[16] Historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because “the State pays for the blunders of private enterprise… Profit is private and individual. Loss is public and social.“[17]
So that we’re all aware, we’re not looking at a socialist economic bailout, but a fascist one.
Note: Bryan posted this already in the comments section, but I think it’s extremely relevant to our current national predicament so I’m posting it again. Plus I think Digg and Reddit are going to eat this up.