Tuesday, September 16, 2008

Just Another Apocalypse

Human beings always believe that the present condition - especially if it is favourable to themselves - will persist into the future. They assume radical change is unlikely. Typical of this way of thinking is Guido's disturbing and, in the circumstances, very unconsoling remark, 'Wall Street will figure out a way of making money again'. Radical change, however, is normal. History is one apocalypse after another. So, when I asked John Gray how he thought the present financial crisis would end, he replied wisely, 'It will end with a different world. And not for the first time....' All detailed forecasting at the moment is absurd. I have seen one expert after another pretend that what is happening does little more than confirm the accuracy of their narrow perspective, in spite of the fact that, a few days ago their perspective did not include the collapse of Lehman, the sale of Merrill Lynch and the desperation of AIG. But it should be clear that the issue is no longer money or the cupidity and stupidity of bankers, it is politics. McCain was much quicker and clearer in his response than Obama. He said Wall Street greed had betrayed the American worker, thus confirming his new Palinesque, nativist position. Given the success of Palin, this is a smart, if cynical, move in that it seizes the economy, previously a McCain weakness, from Obama. I think Andrew Sullivan is wrong on this. It also builds on the fact that, in power and in spite of their rhetoric, Republicans have adopted hyper-Keynsian economic policies. This allows McCain to say he will intervene in the markets far more ruthlessly than the Democrats. If he wins, then the hope of the European bienpensants that America is destined to become 'more like us' will be deferred if not cancelled. America will become more like Palin's Alaska than Merkel's Germany. Balancing this, however, will be the increasing weakness of America. This had already become militarily evident; now it is clear that, financially, America is not the power it once was or thought it was. In August the falling dollar was leading to talk of China using the nuclear option of dollar sales. The dollar has since strengthened - was this quiet interventon by Hank Paulson and friends? If so, who is really in charge here? With American banks, especially in the case of Lehmans, now having their comfortably piratical ineptitude exposed, US credibility is at a very now ebb indeed. Apocalypse? Who knows? Personally I want America to remain as strong as possible. All the alternative global bosses seem so much worse in the sense of more alien to my way of life. But apocalypses are such routine events, we should learn to rise above such attachments. As Nassim Nicholas Taleb says, 'You find peace by coming to terms with what you don't know.'


  1. Bryan, your fave Breakfast telly programme was forecasting, almost, hoping for the end of the world, as we know it, this morning. The media effect on every crisis or event, both big and small, is having an increasing impact on life on earth. I'm off to find a formula for measuring the influence of media depression on the nation. It should be factored in on every story to gauge its true meaning.

  2. I'm not sure it will end with a different world, as such. The world will keep turning, human nature will not have changed one iota and that most pernicious, yet necessary, human trait, forgetfulness, will win out. That is, ordinary folk, those most affected by such appalling greed, will forget, while those who perpetrated the crime, will retire to their palatial homes to plan their next coup.

  3. This morn' the Swallows seem to have a higher grade of activity than usual.

  4. You seem to be indulging in some forecasting yourself though Bryan. Of an extremely pessimistic kind. Of one thing we can be sure on matters economic: If the media says it's an apocalypse, it's a major problem; if they say it's a major problem' it's a short term glitch; if they say it's a short term glitch, it's an irrelevant blip. Doomongering is their business. And yours too, seemingly.

    As for America becoming weaker: I don't think so. Relatively? Of course, but they're are going to be the most powerful nation economically, technically, financially, militarily and inventively for long enough to see us out.

    The sky, contrary to hyperventilating commentators, is not about to fall on our heads.

  5. Bryan, Just because we don't know the future should not stop us from making a guess, hopefully a real good one.

    There is little point in driving past a bad car crash and thinking to yourself, lets find another way of transport instead.

    The problem is a simple one, we are experiencing a asset bubble (or its bursting) caused by a credit bubble brought about by (fill your answer in here...)

    The solution is a simple one, central banks should not allow increases in credit to outstrip the growth in the economy, now if I was an American I would be looking for the candidates to say this explicitly, and then I would vote for them. This is the political choice that has to be made against the other economic options and opinions.

    As for America not being the power it once was (which was always a myth) if America suffers then the world will suffer more, Parts Europe is already in recession, Russia is being punished by the markets for its bad choices, China is not selling dollars because it knows it would be its own suicide, it still has a great deal of power even on the ropes.

    As for Mr Gray, yourself and Mr Soros who I was watching an interview last night, you are all making the same mistake, certainty of thought is not the same as idealism, Plato was never an idealist. America be it from the left or right is an idealist nation, that's why we chucked them out and why America will never be like Europe.

  6. Sigh, another day, another end of the world. Hurry hurry, only 100 more apocalypses till Christmas.

    As Richard Havers suggests, more interesting perhaps is the pathology, the way commentators are acting as if they've suddenly woken up and found the consumer life empty and dull. They talk as if they've been let out of school for a bracing spell of chaos and rapine. I noticed this on the news last night. It could be straight out of JG Ballard. Yes, people become more alive at these moments, but then violence comes closer too. I very much hope you're not about to succumb to herd instinct. These are times when false rumours, pyramid schemes, crackpots and their theories, demagogues and rogues rise to the surface of life. Rich pickings if you know where to look.

    As in your following post, it's not the brokers who are roaring like beasts at the moment. It's the media. We don't yet know whether the fall of the investment banks will come to be seen as a "Singapore moment", as an event that shattered the notion of Western superiority in the eyes of the rest of the world. I'll admit it does look rather like one.

  7. My favorite expression (coined by me): Life is a series of mistakes connected by failures to learn from them.

  8. I have seen one expert after another pretend that what is happening does little more than confirm the accuracy of their narrow perspective

    So it would appear.

  9. Andrew Sullivan is wrong about most things. Meanwhile never mind Mr Taleb and John Gray et al: I am reminded of Saint Augustine who warning against interpreting transient crises as signs of the End '...so that we may not be laughed at by those who have read of more and worse things in the history of the world.'

    Nevertheless all these imbecile columnists such as India Knight writing lip-smacking pieces about how jolly the recession is going to be deserve a public scourging, yea verily. Or perhaps some actual experience of what it's like to be on the wrong end of a house repossession/bankruptcy would suffice just as well. Tossers.

  10. Sorry, that should read 'warned against...'

  11. i reckon it'll all be over by Christmas.

    Civilisation, that is, not the recession.