Triumviri Mensari Imperia
"Only a madman or an economist could believe in infinite growth in a finite system." - Kenneth Boulding
Is it just me, or did we not just narrowly avoid a complete failure of the global market economy? Yet the corporate incest we call news media, the same outlets that were just trumpeting the end of the world as we know it, now refer us to the global 'recession'. Certainly the thousands who have lost their homes, jobs and savings must be insulted by newspeak euphemisms like 'adjustment' and 'downturn'? Didn't we all see "The Wizard", as former Federal Reserve Chairman Alan Greenspan is known, pulling the levers that control the smoke and mirrors of market capitalism?! The Orwellian doublethink of Central Bank intervention in "free" markets, as proselytized by the pope of deregulation himself, seemed once and for all exposed as heresy. They must be putting something in the water; how else is it possible that things are already back to business as usual... even while the banks continue to fall, more quietly granted, but without ceasing.In the '90s, amid the wilderness of token regulatory bodies like the Commodity Futures Trading Commission, there emerged a prophetess of profit. Brooksley Born, then chair of the CFTC, began to preach against what she called a “dark market” of derivatives. So called hedges, bets, swaps and other arcane instruments with names evocative more of gambling than finance, were being exploited in a rigged casino game of high-stakes and perverse profit. Born descried a covert market totally unregulated, not traded on exchanges, without records or official reporting of any kind.... carte-blanche for black-box derivative trading. Not surprisingly, with 5 lobbyists for every congressman in the federal financial sector, a brief inquisition was held and Born was excommunicated from Whitewash-ington.
Six weeks later, LTCM's John Meriwether, head alchemist responsible for converting 500 million into a trillion-dollar golden hedge, soon saw his wizard hat turn into a dunce cap when the titanic fund started turning into lead. Losses of 50 million dollars a day soon got the attention of the 15 banks duped into thinking they were the belle of the ball, in what turned out to be just another capitalist gangbang. The President's Working Group, a sort of star chamber of finance created by Reagan, also noticed and formed a Crisis Group which identified the 'systemic risk'. The system in question, of course, was no less than the US economy. Worried that the first domino had toppled, the cabal of elite geniuses first did nothing; for four days. They then brilliantly suggested that the banks bail themselves out...which they did. Crisis averted. That was 1998!
Even the over-lobbied congress seemed alarmed by this near monetary meltdown. So Greenspan, Robert Rubin and Larry Summers stirred the magic commerce cauldron and came up with a Great Depression anti-formula. Rather than implementing the safeguards based on lessons learned from 1931, they conversely argued that they should be completely subverted and actually used as a reverse template: there should be NO transparency, NO capital reserve requirements, NO regulation on intermediaries, NO prohibition on manipulation and NO prohibition on fraud. They arrogantly insisted that the 'invisible hand' of market regulation, continue to be allowed to deal secrecy, impunity, manipulation and FRAUD into the money game.No wonder the pseudo-science of economics is thought to be complicated. I, for one, do not have a mind capable of resolving such paradox. Maybe, like Greenspan, you have to be an acolyte of Ayn Rand to grasp such mysteries?
By 2007, the sleight-of-hand sub prime crisis and other forms of hot-potato fund management (Credit Default Swaps...etc) precipitated another Chernobyl of capital. Though, by then it was 600 times worse. Literally. The same unchecked grotesquery of greed and hubris had been allowed to reach 595 trillion dollars. This time the failing banks, brokers, trusts and investment houses couldn't bail themselves out. So, in the hopeless, opposite-world logic of 'reward the wicked and punish the victims', generations of working taxpayers will be forced to carry this cross of debt.
Greenspan, conveniently after retiring, recanted in a stunning public admission that his 50yr career and entire world view were based on a fallacy. Tragically, not all of his zealots have joined him in his reformation; Rubin went on to 'earn' 126 million dollars in compensation... for applying the same ideological wrecking-ball to Citibank. Larry Summers is a high-level economic adviser to Obama! Present high priests, the current chair of the CFT commission, the Federal Reserve chairman and Treasury Secretary were drawn right from the same laissez-faire cult that oversaw the '08 abomination; deregulation devotees and champions of corporate capitalism, all.
Sometimes, all you can do is listen to the blood pound in your temples when trying to rationalize insanity.
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posted by Atomos @ 18:49
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