Over on Eschaton, Atrios has been blogging about the financial meltdown for a few years now. He pretty accurately predicted just what we’re seeing now. When lazy journalists were still referring to the mess as “the subprime crisis”, Atrios was referring to it as The Big Shitpile, a much better name, and running pictures from the house-of-cards like game Jenga.
Below the fold: WHEEEEEEEEEEEEEEE!!!!!!
As Harold Feld keeps saying, (and I do too, implicitly in my famous novel Acts of the Apostles), belief in the magic pixie gods of the marketplace is no different from any other magical belief. For years, sane people have been saying that the speculative bubble on Wall Street, and the Guilded Age income disparity created by it were dangerous, and they were a direct consequence of the Greenspan/Republican laissez faire policies of the last several decades which siphoned money from the bottom to the top and favored gamblers, con artists, and thieves over builders and workers. But sane people have been drowned out by bullies with big megaphones shouting “free market” and jingoistic cant.
Since the time of Reagan, basically my entire working life, virtually all wealth created by increases in worker productivity has accrued to the tiny fraction of very wealthy people at the top of the income distribution. During this time, the assault on the middle class has been relentless. And we who are in that middle class have been told by our so-called leaders, and by the media, the horseshit lie that this fundamental change in the way the American economy and the American Dream worked was a natural, beneficial, desirable and inevitable outcome of unfettered capitalism. We were lectured that any attempt to use policy to distribute the wealth that had been created by the middle class to that middle class itself was heresy, apostasy, abomination, communism, cannibalism, bestiality and worse.
And we were told that the geniuses on Wall Street deserved their multi-million dollar salaries and bonuses and tax breaks because they had created and maintained the financial engine that harnessed the energies of the magic free market pixies to allocate resources to their exactly right spot. And moreover, the supermoney geniuses had “earned” every penny they got. Even when they got tens of millions of dollars in severence pay for presiding over the demise of “Fanny Mae” and “Freddy Mac”, those dollars were earned.
On the television, Mrs. Alan Greenspan and the billionaire Tom Friedman and all their comfortable cronies were there to assure us that this was all proper and meet.
Some comic relief began to show up on the scene a few months ago, however, when the taxpayers had to come to the rescue of Bear Stearns. This was wealth distribution from the poor to the rich of the most obvious kind, so naked that not even the most fervent adherents of the Magic Pixie school of thought could say that it was anything other than the privatization of gain & socialization of risk. Welfare for the rich, in other words. (It was all done in the name of market stability of course, of course. Not in the name of wealth transfer.) Blogs of the “teh fr33 m4k3t == teh awxome & libruls sux!“ variety were pretty mum on the deal, as I recall.
And now, today, the Big Shitpile is stinking up Wall Street for real. It’s no longer possible to ignore it; it’s like when the ectoplasmic slime forces which have been growing exponentially underground finally erupt from the sewers of Manhattan in Ghostbusters II. Predictably enough, the wise old men who run everything (WOMWRE) think it’s time for the Fed to step in. So here come all the Masters of the Universe running to Mamma, asking for the Fed to keep AIG, the insurers of the Big Shitpile, afloat. I don’t know what the Fed will or should do, but I will tell you that I love to see all the ”free market uber alles“ people squealing in terror. It’s funny. It makes my day.
My brother Pete, a mucky-muck at Neuberger Berman, is in the thick of this whole maelstrom. Neuberger Berman is ”wealth management“ company that Lehman bought 4 years or so ago, and my brother is a top dog there. I’ve been hearing in the financial news that Neuberger is the ”crown jewel“ at Lehman, the only thing they have to sell that anybody wants to buy. And that’s because Neuberger pretty much avoided buying into the Big Shitpile. So, my brother, I’m guessing, will land on his feet. His net worth has probably gone down 95% over the last 12 months because so much of his compensation is in Lehman stock options, but it’s still infinitely greater than mine, so he’s alright. I don’t laugh at Pete’s relative misfortune– full disclosure: I’ve benefited from the system too, when Pete has helped me out of a few jams. But on the other hand, Peter has never made the argument that the system that has made him wealthy is fair or that it’s he best system for the country. It’s just a game that he has become adept at playing. I can live with that attitude, even as I argue that the system should be changed.
Contra Peter, it’s the free-market moralizing I can’t stand, all that Milton Friedman, Ayn Rand bullshit, all that Ronald Reagan patronizing bullshit, all that ”open your mouth and eat your ration of shit, because it’s free market shit and it’s good for you“ bullshit. I mean really, that crap has got to stop. With the Federal Reserve pumping hundreds of billions of dollars we don’t have to prop up a Shitpile-based economy, with war profiteers taking their tax-dollar fortunes to off-shore tax havens as other people’s children get sent off to the wars that make them richer and richer and richer and richer, with Alan Greenspan saying ”what, me worry?“, can we finally please stop pretending that we have or ever have had a free market economy? It is fiction now, it was fiction yesterday, it will be fiction tomorrow. Can we at least be straight about that?
Today, watching so many John Galts and Gordon Geckos begging for mercy is great entertainment. I want to see them selling off their copies of Atlas Shrugged at a yard sale to pay their mortgages; that’s when we’ll be able to say that some real progress has been made.
1. A while ago I had a nice email exchange with Peter Jeffrey, a reporter/humorist a the Wall Street Journal, about the term ”Subprime Crisis“. I suggested a different name, which he endorsed in his reply:
Fair point, it is an admittedly broad and casual usage. I like ”financial experts who bought pigs-in-pokes & derivatives that they did not understand crisis.“ That is certainly closer to the heart of the matter, and it’s funny to boot.
Admittedly my formulation is not at pithy as ”Big Shitpile“, but we can’t all be Atrios.
2. Support postmodern technohippie creative commons capitalism! Buya a copy of my damn book(s), why dontcha.
3. When I say that the free market & jingoistic blather spoken by bullies with prominent microphones is cant, I mean not that it’s nonsense, but that it is a cryptolect, a secret language designed to be misunderstood. When Dick Cheney or Rush Limbaugh use words like ”patriotism“ or ”free market” , those words in ruling-class cant mean something entirely different than what they mean in English.