Monday, March 2, 2009

Shocking the shock therapists: Zona justice

Bow down before the one you serve...

"Mr. Klau, of the European Council on Foreign Relations, sees a worrying loss of faith in a certain brand of capitalism. “It’s politically dangerous there since they’ve just emerged from an ultraregulated and stifling system, were confronted with shock therapy that created great hardship, and are just beginning to recover and stabilize,” he said. “Now they’re thrown back into an economic and political cauldron.” - NYT

And so it came to pass that a company, AIG, loses 60 billion dollars (for a pretty cool nearly 100 billion dollar year loss) and is comforted by a compassionate government with 30 billion dollars. It is nice to have friends in hard times. I've been thinking about calling up the government and telling them about my own losses, seeing if they could help out.

But I won't, because helping AIG is necessary, but helping me would be welfare.

In a more sensible world, say one ruled by surrealists, watching the boat that the plutocrats are in sink, sink, would only be cause for celebration for those of us on the other shore. After all, the monsters of our kleptocracy are getting their "haircut" - that charming Wall Street term for a beheading. But surrealists did not rule this world - rather, a group of unbelievable pigs did and do. Thus, the celebrated tie of Main Street to Wall street is turning out to be one of those poisoned ties, like the blood that ran through the house of Pelops - from one parricide to another.

I read with some amazement a NYT article in the business section that actually brings in a bit of reality: what if Geithner is using too rosy a scenario? I would laugh, except it hurts. What if? What if the entire premise of the massive outflow of funds to the financial sector since October is wrong? What if the financial sector, which can now be measured in the corny way the movies sometimes measure time - by leaves falling off the calendar - is in the midst of the greatest clawback ever? It is now 1997 time, which was the last time the DJIA was in the 6,000s. And so all the bubble wealth is going. The auctioneer's hand is made of iron, buddy - that ain't no invisible hand no more. The desperate scurrying to and fro of a population that put its democratic instincts to sleep decades ago, and let the worst accrue the most - as long as I get my RV and flat screen tv! - is just beginning.

The guardians thought they would forever apply the shock therapy. They never dreamed it would be applied to them. And they are still having a hard time understanding this.

No you can't take it
No you can't take it
No you can't take it away from me!

3 comments:

Anonymous said...

The NYT article also had this passage:
"Having watched the Soviet Union collapse, the countries of Central and Eastern Europe embraced the liberal, capitalist model as the price of integration with Europe. That model is now badly tarnished, and the newer members feel adrift."

Tarnished, eh?

Meanwhile, over in Ukraine things are "teetering". Which, among other things, threatens gas supplies to Europe. Where the major markets just took a nice nose-dive.

The temperature in the Zona is dropping fast.

Amie

Brian M said...

I thought this was a great line, roger:

And so all the bubble wealth is going. The auctioneer's hand is made of iron, buddy - that ain't no invisible hand no more. The desperate scurrying to and fro of a population that put its democratic instincts to sleep decades ago, and let the worst accrue the most - as long as I get my RV and flat screen tv! - is just beginning.

roger said...

Brian, you like it when I'm cruel! Don't encourage me!