Noah has written one of the most intelligent and thought provoking pieces on the demise of U.S. Economic supremacy I've come across on the net. However I've been reliant on a tiny N95 mobile phone for internet usage of late and it crashed twice after considerable effort.
I have now secured the Wifi needed to respond fully to both his post and questions in the comments section. However I decided that here is more appropriate to respond given they are quite extensive.
"Hey Noah, as you know my N95 browser extinguished some pretty extensive comments I laboriously squeezed out through predictive text to respond to both your questions and terrific post. It's disappointing because they were more coherent than what will follow but now I'm in front of a traditional keyboard I'll try and resume the key thoughts.
I think the point you make early on that everything is imaginary echoes my hyperbole of simulacrum as insanely useful. It lends credence to the notion that much of what we hold as valuable or important is largely illusory, Baudrillard's work supports that much is not as it seems, or indeed is largely defined by what we collectively determine it to be. The Herd dynamic is a potent one for reality definition.
Buddhism has plenty to say on the folly of illusions, but I'm not in the business of proselytizing so moving onwards, all this intellectual posturing is of little value should a not inconceivable liquidity breakdown come about, causing the economic eco-system to stall rapidly, incurring supply shortages through cash flow paralysis, inflationary pressure and a dysfunctional and erratic distribution of basic goods such as food.
Should hunger present itself in such a catastrophic scenario as this, then simulacrum will provide no relief for stomachs, save for the likes of the intellectual and pampered elite such as ourselves. I hope such a scenario doesn't take place, as in an interdependent world we all need to find a commonly beneficial solution.
However it's clear when referring to simulacrum, that the financial institutions have played fast and loose with their customers money and furthermore expect to be rescued from their excesses with additional funds that the taxpayers will bear the brunt of. As you point out, any run on the banks hurts the customers just as much as the key stakeholders . There is an emerging consensus that banks need to have the bricks they indiscriminately loaned money for covered - over and against say a food/travel subsidy program that will keep Joe Sixpack sufficiently nourished and mobile to do the work he is compelled rather than would elect to do. That's the nature of mass unemployment but more importantly that emerging consensus is wrong. People first not bricks and mortgages.
I think the point you make early on that everything is imaginary echoes my hyperbole of simulacrum as insanely useful. It lends credence to the notion that much of what we hold as valuable or important is largely illusory, Baudrillard's work supports that much is not as it seems, or indeed is largely defined by what we collectively determine it to be. The Herd dynamic is a potent one for reality definition.
Buddhism has plenty to say on the folly of illusions, but I'm not in the business of proselytizing so moving onwards, all this intellectual posturing is of little value should a not inconceivable liquidity breakdown come about, causing the economic eco-system to stall rapidly, incurring supply shortages through cash flow paralysis, inflationary pressure and a dysfunctional and erratic distribution of basic goods such as food.
Should hunger present itself in such a catastrophic scenario as this, then simulacrum will provide no relief for stomachs, save for the likes of the intellectual and pampered elite such as ourselves. I hope such a scenario doesn't take place, as in an interdependent world we all need to find a commonly beneficial solution.
However it's clear when referring to simulacrum, that the financial institutions have played fast and loose with their customers money and furthermore expect to be rescued from their excesses with additional funds that the taxpayers will bear the brunt of. As you point out, any run on the banks hurts the customers just as much as the key stakeholders . There is an emerging consensus that banks need to have the bricks they indiscriminately loaned money for covered - over and against say a food/travel subsidy program that will keep Joe Sixpack sufficiently nourished and mobile to do the work he is compelled rather than would elect to do. That's the nature of mass unemployment but more importantly that emerging consensus is wrong. People first not bricks and mortgages.
There is no imaginary dimension to the naked greed that gave the likes of Dick Grasso a $200 million pay-off for ringing that triumphalist Dow Jones, record profit-taking bell, which to the outside world rang more of hubris than fairness.
The US is an amazing country that was in part built on the notion of an optimism for today, driving future growth. It's still an incredible idea; however, the point of crossover not entirely removed from a 'prosperity simulacra' emerged when today's growth fueled the optimism for tomorrow's continued success. This is an entirely different, and logically unsustainable scenario - indistinguishable to many who prefer swift moving scenarios that are easier to track.
It's about optimism driving fortune as opposed to fortune driving optimism. One is the free and self determining dynamic that pays a dividends, the other the dividend that encourages more and increasingly greedy higher risk-taking.
I don't concur that events are as random as you assert. I've pointed out that attendants of the World Economic Forum at Davos were raising the flag of an impending crisis quite some time back, and that on page 225 in Nassim Nicholas Taleb's Black Swan the footnote could not be clearer of the statistical backflips performed by J.P. Morgan's 'Riskmetrics' and the dangerous situation Fanny Mae was in. I would include my post in July that while in the States I saw what was coming and that the reluctance to even discuss the subject of recession and financial collapse by perfectly intelligent Americans was of a magnitude I've encountered in Beijing during the recent Tibetan crisis when any mention of sovereignty was met with the same furious indignation that another point of view could have some validity.
I am however still fueled by a recent rereading of Talebs 'Fooled by Randomness' to concede that it's difficult to divine where this will eventually flesh out. Sure developed economies will hurt more, and developing economies unexposed to the toxicity of goofy financial instruments will experience a rise in commensurate currency-strengthening which, while not stratospheric will have a contextual rise in influence. Those are just broad sweeps but a consensus that it's still early days is one I agree with fully.
As for the lack of moral clarity, you write about, I understand your point in resolving the complexity of being both resentful towards the bank's actions and the need for ostensibly indiscriminate bailouts to diminish the potential for loss of savings. I think there are creative ways of making sure the punitive measures are soaked up by errant banks and not their customers. The idea that they have a carte blanche get out of jail free card, is unacceptable. All it takes is resolve, creativity, strong government defending the populace and not the privileged, and the banks can sit on the paperwork they have a claim to,while the real task of ensuring that the day to day needs of the people who are invariably screwed time and time again are taken care of.
It's crucial in these unprecedented times to ask ourselves the question: am I going to trust the same people who screwed up my mortgage, credit line, savings, security, national liquidity, international credibility and much much more to provide an answer that is audacious, creative, transnational, collaborative and most importantly punitive on the people who at present have mistaken their ability to create wealth with the randomness that potentially could clean them out if the panic concludes they are no longer to be trusted.
Should this come across as supportive that now is a good time to adress poverty redistribution you wouldn't be far wrong right. The disparity between the haves and the have nots globally is unacceptable and now is a good time to to ensure that culture drives economics and not the other way round.
These are quite remarkable times and the opportunity for a new approach is way more tempting than propping up the greedy people who never fail to fleece the people and ask for more."
A sensational post Noah. Exactly what I'd expect from you and an heroic attempt to use intellect to impose a sense of much needed order. We only probably differ on what that order should look like.
