Standard and Poor’s downgrades the U.S. debt rating, the Dow Jones goes into a wild tailspin, and meanwhile Italy enters its own debt crisis, and stock markets in Asia and the Middle East sharply dip as an immediate response to the fears elicited by EU officials and the venerable S&P. (A report today from the Los Angeles Times offers a good summary.)
What the hell is going on?!? As it seems, nobody knows, and so the easiest response is to sink into mysticism. Everyone asks what Bush, Obama, Greenspan, and the rest did wrong. They claim that if only their policies had been different, the crisis could have been averted.
How blind can you be?!? Is it not very easy for us to see how absurd it is to believe that these few men possess magical powers to bend the economy to the whim of their desires? This is just as ridiculous as it is to claim that terrorism as a whole can be explained by the individual will of one man named Osama Bin Ladin. Alan Greenspan is not a magician, and Barack Obama is not god. These two basic facts should be quite immediately apparent, and yet, so it seems, the “informed public” prefers to impute everything to sorcery. This is blind mysticism.
Even the Business Day section of the New York Times prefers to cast spells. An article published yesterday attempts to explain away the stock market with a new pseudoscience called “neurofinance.” The claim is that financial markets ultimately resolve to man’s innate irrationality. Indeed, people do irrational things; this much is obvious. But to explain away the entire financial system as a function of irrationality is no different, again, than to explain it away as magic. It’s irrational; it’s mystical; it’s unknowable; it can’t be explained! That’s what Julie Creswell of the New York Times claims. Ms. Creswell shouldn’t go about destroying reason if she can’t even explain what it is.
Of course, it should be obvious to us that, in fact, there is no such thing as magic. No, it’s just capitalism at work, in all of its inherent contradictions and propensities toward crisis. Nothing more, nothing less.
Back in 2008 when the current crisis finally began to unfold, all of the “informed commentators” said that “nobody could have seen this coming.” One economist, named Robert Wiedemer, is now claiming in his new book Aftershock that he was the sole prophet to see the impending recession coming all the way back in 2006. Wiedemer is a narcissistic charlatan, and Selecting Stones will deal fully with his tomfoolery in an upcoming article, but for now it is worth mentioning that there was another economist besides Wiedemer who “saw it coming.” In fact, he noted that capitalism routinely faces ever-deepening crises. His name was Karl Marx.
We should feel fortunate that we live during these trying times. After 1945, the capitalist world settled into its Keynesian consensus, and now we get to live to see all its contradictions come unraveled. The Western European welfare state is bankrupt. And in the U.S., the non-welfare state is bankrupt, too. Now we get to wait and see who will play the role of capitalism’s Gorbachev.
Whoever it may be, that person will necessarily give magical mysticism its last final breath. Then, finally, we can come face to face with reality.