Saturday, October 8, 2011

Economics is Economic Madness! Markets Buck Reality!

I’m borrowing somewhat from The Slog’s recent post, though I had wanted to comment on the miraculous markets myself before I read his missive. Time and business elsewhere prevented me from doing so earlier, but I think Saturday is the better day for this my first ‘The Week That Was’ post.

Anyway, rating agencies have been slashing away merrily; Mervyn King has proclaimed the current crisis the worst in history; an IMF adviser is warning of imminent global financial meltdown; revolution is beginning in America, is underway in Greece, in Spain and elsewhere; relocating Tokyo has been mentioned as well as the possibility that all of Japan is becoming uninhabitable; JP Morgan lovingly donated multiple millions to the NYPD, who promptly arrested hundreds of oiks (of Occupy Wall Street fame) for being on a bridge, and yet the markets surged upwards:

Dow Jones



The Slog wonders if traders are stupid. Toby wonders if traders (human ones anyway) have anything to do with this at all. It is clear to me—as far as clarity is possible amidst this mud-miasma of disinformation—that the markets are rigged, and have been for quite some time. This ‘All’s Well on the Western Front’ media massage [sic] is so obviously a panic measure by those who want and need this system to survive as is, come what may, is as deft and elegant as JP Morgan’s metropolitan largesse, we can only take market robustness as a sign of desperation and evidence of embedded and rampant criminality. The Powers That Be are losing their confidence, their touch is deserting them. But what can they actually do? The game is up. And ‘we’ are taking ‘their’ power from ‘them.’ (In the end there is only us. As we stop playing along with the elite/non-elite dichotomy and start growing up into direct democracy and political maturity, the 99% will become the 100%.)

The Occupy Wall Street movement isn’t even making any demands of Government, which is exactly as it should be. Why one earth should we demand anything of the criminals looting global wealth so psychopathically, other than to tell them to stop and move aside, join us, or be steamrollered by the turning tide of history? When demands are made, we will be making them of ourselves. We want a system that has human and environmental concern built in. It’s up to us all to build it. And it always has been.

Meanwhile, the respectable organisation the NEF (New Economics Foundation) has just published a book on money creation and the mechanics of the money system. Here is the first paragraph from the executive summary:

“There is widespread misunderstanding of how new money is created. This book examines the workings of the UK monetary system and concludes that the most useful description is that new money is created by commercial banks when they extend or create credit, either through making loans or buying existing assets. In creating credit, banks simultaneously create deposits in our bank accounts, which, to all intents and purposes, is money.”
New Economics Foundation

No one who regularly visits either this blog or others concerned with similar objectives will be surprised by the above quote, but I think we should remember it is still controversial that money is the plaything of commercial banks worldwide (with the exception perhaps of China), that the money system is purposefully shrouded in mystery, and that we are again being asked to pawn our children’s futures to protect the system, the commercial banks’ ‘right’ to continue the charade they have employed for centuries to enrich themselves at the expense of others. The only human response to this redoubled attack is rebellion. Anything less is an abdication of our humanity. If we relinquish our dignity, we have nothing of any real value to live for. Isn’t that exactly what we are waking up to?

In short, the fact that the deeper system is the problem is the idea which needs to be promoted most energetically. It is not until this is recognized and understood by a sizable and coherent minority of people across the planet that effective change can be begun in earnest. When the numbers of us able to disseminate this reality compassionately, wisely and artistically to any ready, willing and able to hear it, reaches 10% and above, the tipping point will be reached. Perhaps we are already there. What lies before us is keeping vital infrastructure healthy and operational—the Internet, food supply chains, energy delivery systems, hygiene, sanitation, water, etc.—and learning, day by day and decision by decision, how we want direct democracy to work. Some of us will have to stay in the current system for this to be possible, as contacts, moles, what have you, others will be at the forefront of the new.

There are no guarantees of success, nor can there be a clear idea of what success will mean. And yet, the very fact that this is even beginning, whatever the outcome, is a success already. Live or die, the richer life we all want begins with uncertain courage flickering to action in our hearts, then flows outwards from there. We all have a role to play.


Debra said...

Allow me to associate, as usual, Toby...
Yesterday I had lunch with a former colleague (clinical psychologist, working at the local psychiatric hospital).
And she told me that her "unit" now had a commons set up where... everybody was "equal", which meant, that EVERYBODY did the dishes, (theirs or others), used first names, in short... conviviality was the RULE.
And it struck me while listening to her that the worm in the apple stems from our hatching a NEW good idea, and since we believe in it, deciding that it is going to become... the law, the rule, you pick.
Like legislating loving your neighbor.
That's why it ALWAYS FAILS, Toby.
(And why I cultivate my garden...)
Because we have to institutionalize the "new good (improved...)" idea.
And that is precisely what leads to "the corruption of the best engenders the worst".
In my opinion.
My husband and I are reading "The Merchant of Venice" very very carefully.
Just the two of us, because I have not yet managed to persuade ANYONE that "The Merchant" is the equivalent of an excellent economics textbook in much more palatable form.
On money and credit.
On my bedside table stands the book of Jean-Joseph Goux, called "The Merchants of Language". It is a book about how the decline of patriarchy has precipitated the decline of a STANDARD of money, (and our other symbolic systems, I might add).
Personally, I am not really keen on patriarchy. BUT... I DO recognize the need for standards (of money) if you don't want things to go.. slip sliding away down the toilet.
But you know me.. I haven't heard many people actually clamoring that it is the filthy meat and potatoes game, that gives the filthy lucre scam its reason for being.
Most people trot out that tired phrase "but we have no other choice..." (translate, I can't IMAGINE how things could work (lol) any other way.
As for the madness part, I DO seem to recall that before WW2, a fair number of ALMOST assimilated Jews looked upon the prospect of the concentration (and murder) camps with the same.. MIRACULOUS FAITH (that they would not materialize) that the "markets" are now showing.
Never underestimate our capacity to believe...
Particularly when we are trying so hard to keep our belief going, and we are shitting in our pants in fear, AND too lazy to imagine what we could do as an alternative.

Toby said...

I don't have enough time to also study Shakespeare's work. That will have to wait, or may never happen. We each follow our own path. I bet you don't believe me when I say you'd get a lot from reading Eisenstein.

Always fails? What does that mean? It's one of those binaries again. But in that everything changes, and growth and decay are rhythms of nature, I guess you could say it always fails. Nevertheless, we have a system that has outlived its usefulness. Things have changed and we have to adapt to 'survive.' The resistance to this adaptation is enormous, since so much energy, capital, money, etc., has been invested in erecting and maintaining this system. No surprise there.

As to insisting on equality, I am most certainly against that. We're going to see how this breakdown unfolds, each of us involved in whatever way, and the rest, whatever that is, will take care of itself. I insist on nothing, except that we are at an historical turning point.

But yes, belief is an enormous part of the magical levitation of the markets, if only at the level of those rigging it. Perhaps they believe against all evidence that rigging the markets is going to work in the way they need it to. Or something more sinister. I don't really know, but rigged they are.

Debra said...

Toby, behind the belief in the markets, there is the belief in the "FREE" markets.
That means that the "free market" system is an intricated part of ALL of our beliefs about freedom, and the foundations of our modern governments since the 19th century.
What is pretty ironic, is that Galbraith says, in "The New Industrial State" that in the 1970's, people were talking about how the "free markets" worked when we were living in planned economies.
So... maybe the delocalizations, and the globalization of our economies are the RESURGENCE of the "free market" system in economies that have been planned/regulated for a very long time ?
In other words, for years we have been telling ourselves that we lived under free market systems, when in fact, we have not ?
Is THAT what we want ?
If we want MORE REGULATION, it will not be solely in the form of regulation of the markets.
We are already seeing just what form that regulation will take.
The markets are rigged ?
Regulating the markets is rigging them too, isn't it ?
We believe too much in regulation, in my opinion.
There are ways to resist this. INDIVIDUALLY.
That's what I am doing, because I now believe in doing things that way.
"We" definitely believe in "reality".
i don't believe in reality. I think that "reality" is a REALLY CONVENIENT IDEOLOGY that "we" trot out regularly when somebody does something that we don't like, or that we don't believe in.
I don't read Eisenstein because I have become rather allergic to reading the SOCIAL "sciences" to "get" my knowledge.
Have you heard of the new Nobel literature winner ? The poet ? Has he been translated ?

Toby said...

Agreed. I am anarchist in my position, but I believe markets can never be free, because there is no such thing as freedom. However, 'free-as-possible' markets are probably those without money and the pursuit of wealth as a goal in the context of differential advantage. And, in yet another way, everything is free. Humanity has not been following a fixed recipe given us by 'God' at the dawn of time. We've been making it up as we go along. Because we are a social animal, the bloody mess of establishing and re-establishing consensus has been part of this, as has ignorance. On top of that things are always changing, but now, with this system as rigid and self-defensive as it is, there is enormous tension between the beneficiaries of this system, and those suffering increasingly under it. Hence the epochal importance of this period.

Anyway, I'm not sure where you get the idea I'm for more regulation. I never have been.

Eisenstein's "The Ascent of Humanity" isn't social sciences, more art, I'd day. Kind of a rambling, erudite poem about everything. He certainly has no training in the social sciences.

I haven't followed any news today. Know nothing about any Nobel prize.

RogerGLewis said...

Hi Toby popped across from Golems blog after reading of your making changes to act against the current trials and tribulations. I have been doing something similar myself these past few years but chose to move to Sweden with my young family and Swedish Partner.
Apart from now feeling I must read Eisenstien just to say well done and more power to you.
This amused me the other day Iw as doing something very geeky and it was on a you tube channel I was looking at can't remember what now something to do with FFt probably.

Toby said...

Hi Roger, thanks for the warm wishes. Backatcha, as they say across the pond!

Eisenstein can be read for free on line, both "The Ascent of Humanity" and "Sacred Economics". I bought both because I respect the man and his work, but at least you can get an idea of how much his writing resonates with you first, before shelling out on what are high-priced books.

Good luck to you and yours in Sweden. The company I work for in Berlin is Vattenfall, actually, so I've been to Sweden a few times. It strikes me as a really nice place, and the people I met there were all open minded and well educated, without being snobby. First impressions I guess, but there's often something to them.