Wednesday, September 02, 2009

Welcoming the disaster

Two (among others) good links from Credit Writedowns:

"On April 17, 2007, famed short-seller Jim Chanos and other hedge fund managers met under tight security at the World Bank in Washington for the G-8 meeting. Chanos and Paul Singer briefed prominent policy officials about the growing financial instability. They gave irrefutable evidence that a catastrophe was building. They told officials that banks that were about to sink the global economy. They called for decisive action.

And they were ignored.

Gordon Brown was there..."

- New Deal 2.0

My comment: there's always a nice conspiratorial frisson when you think you can show They Knew All Along. Except there will have been other voices (like the 10 - 15,000 American economists who didn't foresee the credit crunch). And self-delusion. I don't think this nails the guilty parties.

Expect a major house-cleaning, a second American Revolution. We predicted the "Great Depression 2" around 2012. Well, we doubt taxpayers will passively sit one more time, like in the 1930s, in 2000, and the past few years. Next time voters will take a page from the history books about past revolutions in the American Colonies, France and Russia. A perfect storm will erupt in a massive global credit meltdown, bringing down Wall Street and the clandestine $670 trillion shadow central banking system.

- Paul Farrell

My comment: The appeal of revolution is to juvenile minds drunk on testosterone and misled by ignorant optimism. This is why the Communists have focussed on the young. I am reminded of how Rupert Brooke welcomed the onset of WWI:

Now, God be thanked Who has matched us with His hour,
And caught our youth, and wakened us from sleeping,
With hand made sure, clear eye, and sharpened power,
To turn, as swimmers into cleanness leaping,
Glad from a world grown old and cold and weary,
Leave the sick hearts that honour could not move,
And half-men, and their dirty songs and dreary,
And all the little emptiness of love!

I don't think he would have agreed with his younger self by the end of the Great War. After a disaster comes the greater disaster: Romanticism.


Paddington said...

When the dust clears, if we end up with the super-rich and peasants again, we cannot help but go backwards. Peasants in feudal societies don't work too hard, and they can't advance.

Democracy relies on the illusion of upward mobility.

Sackerson said...

Good last sentence, tho' "promise" might be better.

OldSouth said...

Undoubtedly, change must come, lest we all end up as vassals of the state/banks.

I do not bear any enthusiasm for those 'romantic' souls who think that bloodletting will somehow lead us to some great better day. How many died in the process of the creation of modern India and Pakistan in the 1940's? Here in the States, it took a couple of decades to recover and stabilize after the American Revolution, a fact often ignored by today's zealots.

Our our War Between the States was sold by zealots on both sides (in 1861) as a brief 'walkover' affair.

Four years later, all had been disabused of the notion, and it required about fifteen years before the South began to find its legs again. It took another century to begin to redress the racial divide, all at huge cost in blood and treasure.

Anonymous said...

"Democracy relies on the illusion of upward mobility."

Illusion? I have been "upwardly mobile" in both real terms and relative terms. Not sure that democracy relies on such things anyway - capitalism does. It is the carrot that continually justifies the enslavement of the people to a 40 hour week. But then again the the only alternative considered so far is socialism which starts by removing the carrot and quickly finds it must soon resort to the stick.

Anonymous said...

Politicians aren't very good at averting disasters that haven't yet caught the public imagination.

They are happier dealing with global warming since there is at least some interest in it from on sector fo the public - but their willingness to deal with it is tempered by an understanding that voters have more immediate concerns about jobs. In that respect you can understand why informing them of impending financial doom was going to fall on deaf ears - they needed to grab the attention of the public first via a media thirsty for bad news of any kind.