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“The Market”


Two quick points. –

First, to better understand the current and indeed enduring crisis of financial capital and how thoroughly its actual products demolish its own pseudo-legitimations, built-up like Manhattan skyrises over many years, keep in mind concepts such as "derivatives mongering" (like war-mongering), and the Twin Towers of the "efficient market hypothesis" and "rational expectations" theory.

Particularly if you take a look at Alan Greenspan’s October 23 testimony before the House Oversight Committee, and pay attention to the reactions that immediately greeted it around the world.

The fact that this asset-bubble-inflating, labor-liquidating, professional Ayn-Rand-strap-on for privileging elite speculators over the mass of humanity had spent his career as an enforcer and vocal advocate for this utterly discredited system ought to cause you profound concern about the capacity of this country’s government (net-of-net) to address any of its fundamental problems, and therefore raises serious doubts about the survivability of this country as well.

 

"Testimony of Alan Greenspan," October 23
"Greenspan: ‘Credit tsunami’ to have severe impact," Martin Crutsinger, Associated Press, October 23

"Tough to believe Greenspan’s disbelief," Steve Goldstein, MarketWatch, October 23

"Greenspan says crisis left him in ‘shocked disbelief’," Stephen Foley, The Independent, October 24

"Greenspan Concedes Error on Regulation," Edmund L. Andrews, New York Times, October 24

"Greenspan Admits Errors to Panel," Kara Scannell and Sudeep Reddy, Wall Street Journal, October 24

"Greenspan Says He Was Wrong On Regulation; Lawmakers Blast Former Fed Chairman," Neil Irwin and Amit R. Paley, Washington Post, October 24

 

(Also see "Excerpt: The Age of Turbulence by Alan Greenspan," Financial Times, October 4, 2007.)


Second, this morning’s Washington Post reproduced a great little quote from long-time Wall Streeter James Grant.  (Incidentally, I reject the standard characterization of Grant as a "contrarian," on the grounds that were he truly a contrarian, he’d have nothing to do with Wall Street, but would long ago have moved to Assisi or some reasonable facsimile thereof.)

The Post quoted Grant as follows ("Greenspan Says He Was Wrong On Regulation; Lawmakers Blast Former Fed Chairman," October 24):

  "Markets and societies move on belief systems," said James Grant, editor of Grant’s Interest Rate Observer and a longtime critic of Greenspan. "The belief system of finance featured the notion that someone with unusual power to see around corners and through walls and into the future was running things, and that someone was Alan Greenspan."
  "His reputation was as inflated as were house prices in the early 2000s and tech stocks in the late 1990s," Grant said.

There is one serious problem with Grant’s observation, however. — Namely, this: It fails to grasp that there are systems of belief which are more or less warranted, and there are systems of belief that are false — that is to say, ideological. 

All of this crap about "markets" belongs under the category of systems of false belief — ideology.

What is more, so-called "markets" (as well as the "efficient market hypothesis" and "rational expectations" theory — essentially, false beliefs crafted so as to rationalize the indefensible exploitation of one man by another) fit perfectly the classical definition of ideology as (a) a system of false beliefs, which (b) is very well-organized and coherent and widely inculcated (you know: K-12 and beyond), and, crucially, (c) the tenets of which appear in the minds of its adherents to justify practices that are inherently immoral and abhorrent, and thus that prevent its adherents from recognizing as such.

So let’s rewrite James Grant’s observation to read closer to this:

  U.S. society (as well as every place else it infects) moves on a system of false beliefs.  The specific belief system of finance featured the notion that someone with unusual power to see around corners and through walls and into the future was running things, and that someone was Alan Greenspan.  [Or: That someone in the abstract was simply known as The Market.]
  Greenspan’s [or The Market's] reputation was as inflated as were house prices in the early 2000s and tech stocks in the late 1990s and so-called emerging markets before then.
And as this system of false beliefs now comes crashing earthward like the Twin Towers, our goal must be not to re-inflate it, not to rebuild it, but instead to build something humanly worthwhile out of the rubble.

That is to say, let’s make of James Grant’s observation what Marx might make of Grant’s observation. –

Otherwise, the exact same cycle merely will be re-engaged.

 

"Weapons of Collective Destruction I," ZNet, October 7, 2008
"Weapons of Collective Destruction II," ZNet, October 21, 2008

 

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