Deepening Crisis

Oh yes, I know that the stock market had an orgie of a day yesterday on the news of the schemes being cooked up by the Obama administration to deal with the toxic assets currently in the financial system. More of the same and it won’t work because it is a refusal to deal with reality. The whole reaction to this massive mess of fraud is more fraud. The spectacle is truly disgusting.

Harvey Ussery of The Modern Homestead has written a fantastic article regarding the deepening crisis. I encourage you to read it. Here’s an excerpt:

The only thing surprising about the crisis—I should say the crises—now deepening around us, is that it has taken so many of us by surprise. For several years before the subprime mess started the current hemorrhage in global finance, I read detailed predictions for how the subprime mortgage bubble would burst, with the shattering and cascading effects in the wider system that we have now seen—analyses, mind you, not of Ivy League economic think-tankers, but of reflective folks of ordinary common sense like you and me. If such people were able to read the writing on the wall, where were the deciders in government and Wall Street, the head of the Federal Reserve? What were they thinking?

But this crisis has been long in the making, and the biggest mistake would be to assume that an anonymous “they” out there—Wall Street moguls, hypesters for junk-level, credit-for-everybody mortgages, OPEC gougers—are the ones who have brought us to grief, through no fault of our own. We are supposedly adults in a functioning democracy, not children, and as such we cannot escape responsibility for our willful complicity in an economy that defies compatibility with natural systems, meaning natural limits, and which opts consistently for short-term gain in preference to long-term soundness and sustainability.

I remember reading on the first page of the first economics textbook I ever encountered (Economics, by Paul Samuelson, when I was in graduate school) that the foundation of our economy is: perpetual growth. Not the natural resource base. Not equitable distribution of wealth. Not sustainability. The author was emphatic and unambiguous: Without constant, vigorous expansion, our economy would stagnate and fall apart. And on that first page, even a bonehead neophyte ignoramus like me was saying in confused surprise, “But that’s impossible—nothing can grow without limits!” (Except cancer, whose perpetual growth is precisely what in the end kills its host.)

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