Friday, December 18, 2009

God Jul! And a Hell of a New Year!

"The winter of our discontent" (Shakespeare, Richard III) describes this holiday season pretty well, at least if you're tracking our progress in dealing with the the financial crisis, the health crisis, or the climate crisis. In my experience over the last five decades, I think this is the year that most people fervently hope next year will be better -- and have no confidence it will. I would say I am one of the least change-averse people around, but I'm finding it hard to look forward to anything I see for the next year or longer.

One way I'm seeing it is that we have been given a clear demonstration of the Golden Rule: those who have the gold make the rules. This is most obvious in the Finance game.

 A year after the scale of the financial debacle was becoming clear, after we teetered on the brink of a systemic meltdown worldwide, the players who got us to that precipice are still in charge of how the game is played. And richer than they were. And with no real changes in how they do business. 

The reality is that they've been consolidating their power for the past few decades. It took a while to get the pieces in place -- an "efficient market" meme that enthralled Republicans and Democrats, relaxed investment regs and oversight in the US, a consolidated market with little real competition, a bought-and-paid-for body of key decision makers worldwide, and WTO rules that opened up the entire world as a captive market (except for a few skeptics, like Brazil) -- but by about 2000 they were ready to roll. They had known that the US economy had reached its peak production in the late '80s and no new wealth was being created. They just needed a few bubbles to gain control of the remaining assets, and after they got housing in the early '90s and dot-com in the late '90s, housing II in the '00s was the perfect storm, from their point of view. It was a government-protected form of wealth transfer that had the beauty of really only benefitting a tiny number of people in the rarified world of finance. (Goldman Sachs average bonus, for each of 30,000+ employees, this year will be $700,000.)

As the previous bubble inflated in ways that clearly (to at least some financiers) were not going to last, the word around the trading floors was: IBGYBG -- "I'll Be Gone, You'll Be Gone. Make the trade. Sell the CDOs. And we'll meet again on St. Barts when the dust clears."

It may be that the people in the corporate and political elite were realistic enough to plan for the future by building their own fortresses of solitude: "If I can't save the planet, I can at least save my family, so why even try to save the planet?" Or maybe they were just lucky.

Looking around us now, it is clear today that Copenhagen will not lead to any fundamental change to the behaviors that are speeding climatic changes that will not just threaten people, but whole cultures, the supply and transport of food and products that don't just keep business humming, but keep people from starving.

On the home front, not only is financial regulation become a toothless joke, but healthcare reform is simply a gift to the insurance industry -- another transfer of wealth at the expense of those without the gold. And this in a country that pays more than twice as much per person for health care, and has a lower life expectancy and higher infant mortality than almost all developed countries. So why should we change it?

Today, Dennis Kucinich made it clear: "The class war is over. We lost. Working people lost. The middle class lost."

So, let's play it out in political terms. With the Democrats unable to create a political consensus that brings any real change, with Obama playing the (smart, but conventional) political game by not leading where there are no followers in-government, with Copenhagen a joke and no clear voice about the real threat of climate change, the Republicans will be be loud, and unified in their negativity, channeling Howard Beal, passion trumping facts. They pick up seats in Congress. And they've learned that, with a compliant news media, they don't even need a majority to say "no." And of course, the entire news media infrastructure is still reporting politics the same way they're reporting Tiger Woods or Sarah Palin: "he-said, she-said, and damn the substance -- it makes my brain hurt. Just tell me who's winning."

So, what we get is, at best, continued stagnation of the real economy, chronic unemployment that is much higher than the official figures, wave after wave of foreclosures, rising bankruptcies, falling industrial output, accelerated decline in quality of life (transportation, infrastructure, prices, education, health care).

Maybe we get to 2012, maybe Obama wins, and it's more of the same, a lot of people dying slow. But maybe Obama loses, and then maybe something will really happen. Maybe, after another two or four years of life under the leaders who got us here, and have no new ideas beyond "no," enough good citizens will see that it's not the Republicans, it's not the Democrats, it is what the system has become, and the system is not set up to have an honest discussion, let alone to protect their interests. Then, and only then, maybe somebody like an Al Franken or Dan Grayson will be in a place to stand up and say BAU stops here.

But then, maybe before that there'll be another bubble and everything will be back to normal. There's something to hope for.

1 comment:

  1. Great essay, Bill. Couldn't agree with you more. Since history is largely the story of the elite, political and economic, taking advantage of their positions at the expense of the masses, sometimes I wonder why people today expect that will ever change. However, it seems American financial stars have reached a new level of cynical manipulation when, as we discovered this week via the NYT, Goldman Sachs was shorting the Credit Default Swaps it was promoting and selling to its clients as early as 2006. It's as if, if we were being honest, Bernie Madoff should have been Time magazine's Man of the Year. Merry Christmas to you, Nina and all the family!


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