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| The Scary Chart: the bail-out money corresponds to phantom dollars and decimated rich-person portfolios. |
This chart of Schiller's housing prices is spreading through the Internet from the New York Times. Scarily similar graphs of the bloated Dow Jones Industrial Average come to mind. I studied the chart for days, resting only for prayer, and finally came to counterintuitive conclusions.
"It's like Lenin said, if you look-"
"I am the Walrus?"
"-for the one who?ll benefit, uhhh, you know-"
"I am the Walrus?"
"V.I. Lenin! Vladimir Ilyich Ulyanov!"
Even anticommunist Walter from The Big Lebowski saw the validity of Lenin?s point. Marx was a social scientist analyzing human behavior. While the kneejerk right never credit Marx, he had some solid ideas. Ideologies are historically rooted in social classes, or if you like, groups of people with similar broad interests. Contemporary cognitive science and evolutionary psychology show that the human ego lies to itself--often unconsciously--across a wide variety of situations. These lies usually accord with an intelligent design: egotism and self-interest, face-saving and getting a bigger slice of pie.
Examined from a contemporary scientific perspective, Marx was pointing out the subjectivity of rational analysis in the upper classes, historically. The combination of halfwit reasoning and mutually-reinforced self-deceit in a social group produces that group's typically specious conventional wisdom. Therefore upper class interests took policy precedence, historically, especially in situations when a powerful group's collective interests were palpably threatened. Like the Godfather said, "I'll reason with him."
Aristocratic communities intuitively and systematically excluded analyses that appeared threatening to them. The exclusions could produce incredible howlers. I never got into Marxism in college. But don't be blinded to Marx's good point. And that's all it is, really, tens of thousands of books later: a really good observation contemporary science still supports. You can apply this "Marxism" to groups of scheming human beings everywhere.
So what does Marx's good idea mean for our current economic situation? Well, let's start Marxist: everyone in Congress owns property. Their financial interests are yoked to the "Extraordinary Popular Delusions" style housing boom prices. They almost all have investments in Reagan's stock market, as do all their friends, not to mention their corporate masters. Both Houses of Congress are like one big monstrous organism, its assets dwindling, oftentimes halved or worse. While normal Americans lose jobs they've had for years, the rich lose money from investments that only recently exploded in overvaluation.
Asset owners manage to conveniently forget their properties only recently boomed so big. And all the actions they're taking right now seemed aimed to sustain not America's overall well-being, but their overinflated investments. While these actions are supposed to help the economy in general, that's where the window of Marx's mutually-reinforcing self-deceit could open up, disastrously. Because according to the naked eye, both stock and housing prices are madly exploded, and need plummeting or severe readjustment.
The abstraction of governmental representative has worked well enough up to this point, despite the often-noted subservience of politicians to corporate interests. But now we?re looking at a really personal invasion into super-rich livelihoods--both the politician and campaign contributor. Housing prices that gave you a billion in assets have reduced you to a lowly millionaire. The rich, super and not, are feeling a kind of crunch.
Just imagine the pressure of cognitive dissonance something like that could produce in a community of rich Americans trying to help America. Now make way for Marx clawing up through the dustbin of GULag corpses and napalmed Vietnamese peasants. He?s yelling really long sentences in German, and he's pissed.
Every vetted economist, every decision whom to televise, each "reasonable" editorial: it's all being decided not by intellectual combat, but in a vacuum. The argument is between economists, not political parties. All we know is our ruling classes are fully invested in this potential Ponzi boom folly, nearly every last one of them. The actions the class has taken thus far, Republican and Democrat, only seem to support the class's immediate self-interest: recouping their many losses. In this context, the dissent gets coded as insane, inadmissible. And there?s plenty of dissent from economists. It looks scary. Don't know if the dissent is true: but it looks scary. And since none of the current bail-out economists could accurately predict the current collapse, their credentials are seriously in question.
In recent history, all the ruling classes operated relatively rationally; or at least according to their party lines. Rich and poor interests found a reasonably prosperous coexistence. The party lines of Republicans and Democrats theoretically lined up with coherent governing ideologies. While Marx's analysis could be stretched to make some observations about contemporary politics, it was very nearly historically irrelevant. With poor people often Republican and the rich often Democratic, it'd certainly all gotten more sociologically complicated.
But now that the financial crisis is no-politics land, the old principles could have new application. Because nobody really knows what to do. Not The National Review, The Nation, Bush, Obama, me or you. We're all beholden to economists, who themselves seem split. And if you think pro-bailout economists aren't invested inextricably into the present economic boom, I have some tulip bulbs I'm selling here for just $999 apiece. All power-players have one thing uniting them: personal, direct investment in the economic status quo. Which gives the dissenting economists like Peter Schiff a scary plausibility. Of course, Peter Schiff advises and invests overseas, that's his business, so he's not free of suspicion, either. We're practically in academic postmodernist territory now!
Under current conditions, Marx the social scientist seems suddenly and scarily relevant again. Analyses unfavorable to the affluent, decision-making communities might be intuitively excluded, under roughly the same conditions Marx was describing clouding the fair judgment of "rational" ruling classes throughout history. All the pseudo-rational folly may be happening in precisely the same egotistic manner throughout the affluent halls of power. Thus individuals with many bloated assets will unquestionably favor plans that appear likely to return value to those assets. They won't take actions that could restore greater health and equilibrium to the economy, at the expense of their personal portfolios. It's unthinkable, like transitioning from Feudalism to small landowners. There's a natural order God planned, or whatever nonsense supports your class interests.
Bush was bailing out. Now Obama's bailing out, too. We're plunging into unprecedented debt, like Reagan pioneered. All just to keep certain assets stable. We're told this is crucial. I?m not proposing a solution. But it appears clear government is favoring one rational point of view over another, just as their personal assets are dropping. They believe they feel the financial pressure: so their obvious solution is to bolster their economic assets, regardless of what this might eventually do to America.
Only these assets appear pretty madly and obviously out of sync. How could anyone believe the current home prices, as displayed on the graph, should be sustained? "If you look for the one who'll benefit..."
But just like the Bush administration demonstrated, believing you'll benefit is no guarantee you will.
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