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Same object, different view

Andrew Sullivan sees the same thing differently than I do (unsurprisingly). About the sources of the finance crisis, he writes:

The reasons for this are well known. Since the mid1970s, most American incomes - with the marked exception of the very big - have stagnated as even growth in productivity has been swamped by far fiercer global competition and freer trade. Americans, resistant to the idea that their incomes cannot keep growing at the free-lunch pace of the 1940s to the 1970s, decided to get rich the easy way. They borrowed to reflate in the 1980s, played the stock market in the 1990s and gambled on the real-estate boom in the first decade of the 21st century.

The shrewd ones succeeded in gaining and then selling before it came crashing down. Most, as usual, didn’t. The greed that led many ordinary Americans to take out loans they had no way of repaying and the recklessness with which banks and mortgage companies satisfied that hunger are, in retrospect, staggering. Both the banks and the borrowers deserve their comeuppance. And a truly conservative, free-market administration would be happy to let them fail.

Sullivan makes an interesting concession — I suppose it is a concession — that the typical American wage has stagnated since the 1970s; while his attribution of this to the great emancipation of the markets is specious, I do think it is interesting that this is just bandied about as the source of the finace crisis. People, well, working people, received less of the share of total social productivity than they had before; I call this a greater amount of theft, Sullivan calls it a result of greater competition and the free market. Whatever: semantic difference.

But then here comes the thing: Americans, whose wages became stagnant, are made to be the scapegoat for several waves of financialization that were intended to contain growing structural inequalities in the economy? This doesn’t follow. It’s ludicrous — moralistic pap. Oh, the stupid, cretinous, avaricious American public wanted a “free lunch!” Nevermind the fact that their wages depreciated in tandem with a surge in overall social productivity. How else was all the overabundant shit going to be absorbed? Let mealymouthed conservatives curse the loathsome cupidity of the typical American consumer all they like, the financialized credit industry kept the US, and the World, economy afloat for quite some time; now that it is unraveling, we’ll need someone to blame. And there’s no one better to blame than the one most ripped off by the whole affair: those whose wages stagnated as they watched the greater part of social wealth shoot through the roof, who worked for less a share of the collective pie, who paid usurious interest on plastic accounts, who may even have dreamt — callous asshats! — of owning a home! Let them have their comeuppance! All hail the Free Market!

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4 Responses

  1. once this shit comes crashing down… once this shit comes crashing down…

  2. People will have a harder time eating?

    I’m personally hoping this crisis causes the end of neoclassical economics on the wide scale, and that there will be a return of Keynesian and Marxian approaches to management of the economy. Neoliberalism, you have demonstrated your worth!

  3. Maybe people will be more encouraged to not be considered as part of the same country as Wall Street. We consider this a United States problem, but this is a world state and capitalism problem. I don’t see why I am suppose to pledge allegiance to the same flag that Wall Street does.

  4. That may be so, but you don’t really have the option to simply disentangle yourself from Wall Street. Legal, national, and other power frameworks exist that forcibly make citizens of the US citizens alongside Wall Street. And Wall Street is pretty good at getting what they want.

    There’s no real reason for this. Well, I mean there is. It is how things turned out. But that’s not a sufficient reason for justification. That doesn’t change that it is so, however.

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