More on the bright side

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I am often accused of being a doomster but I am not. I read the horrid economic news with very mixed feelings: fear, compassion, self-pity and hopeful exhilaration are all combined.

The first three are easy for my readers to figure out. I'm sure many share one or all of them with me. The last one, hopeful exhilaration, may need some more explaining.

Let's have a sample of fully documented mainstream doomsterism. First this from Samuelson:

Since the early 1980s, American economic growth has depended on a steady rise in consumer spending supported by more debt and increasing asset prices (stocks, homes). Just as the mid-1980s signaled the end of Japan's export-led growth, the present U.S. slump signals the end of upbeat, consumption-led growth. But its legacy is an overbuilt and overemployed consumption sector, from car dealers to malls. The question is whether our system is adaptive enough to create new sources of growth to fill the void left by retreating shoppers.

And then this from Krugman:

If you want to see what it really takes to boot the economy out of a debt trap, look at the large public works program, otherwise known as World War II, that ended the Great Depression. The war didn’t just lead to full employment. It also led to rapidly rising incomes and substantial inflation, all with virtually no borrowing by the private sector. By 1945 the government’s debt had soared, but the ratio of private-sector debt to G.D.P. was only half what it had been in 1940. And this low level of private debt helped set the stage for the great postwar boom. Since nothing like that is on the table, or seems likely to get on the table any time soon, it will take years for families and firms to work off the debt they ran up so blithely. The odds are that the legacy of our time of illusion — our decade at Bernie’s — will be a long, painful slump.

Just a sample, and not of wild men like Kunstler or Orlov: these are Samuelson and Krugman talking, but they are talking real pain.

This incipiant pain reminds me of my favorite quote from Spike Milligan's legendary BBC radio, "The Goon Show",

(horrible, blood curdling scream in off) ARRRRRRRRRRRRRRGGGH!

Spike: "Listen, someone is screaming in agony... fortunately I speak it fluently."

I don't know if I'm alone in this, but almost everything important that I have ever learned in my now long-toothed life has been won with certain pain. I associate intense discomfort with the acquisition of valued knowledge. Mind you, I don't find suffering "redeeming" or even pleasurable, only instructive.

The elite School of Hard Knocks is finally opening its ivy clad halls to America's core, its heart: the great American middle class.

Both Samuelson and Krugman fear a coming "lost decade", however, instead of a "lost" decade, I see a the possibility of a decade of discovery, of restless interrogation, of world transforming consciousness. For the American middle class and its docile belief in its methods, myths and heroes is both the first victim and the principal instrument, the cutting edge, of the system and its failure. These bland, well meaning people are the vanguard. For the world to ever change they must change first.

I am exhilarated by the prospect of white bread, middle class, "normal" Americans finally beginning to seriously question their system. By this I mean Americans asking the same kind of questions that South Americans, for example, often ask themselves: "I am a hard worker and the land I live in is rich in raw materials of every kind... why am I poor?" And the white bread gringos finally coming to the same conclusion that our Latin cousins came to long ago: "because a infinitesimally tiny minority of the population, an astronomically wealthy few, who couldn't care less whether I or my children live or die, has arranged the world and its commerce and institutions entirely to their own benefit".

If it takes the American middle class ten years of being put through the jumps just to metabolize that, it will be a decade well spent, one whose praises their children and their children's children and the whole world will happily sing. For this is knowledge that has been in the possession of not just South Americans, but most of our planet's inhabitants for centuries untold. However, the day that middle class Americans, with tears and travail acquire it... the world will finally change. That is if they don't turn to fascism first, of course. DS