Everyone just needs to tighten their belts

Via Atrios, an excellent post about the recession:

[Recession is] often taken as a big deal in the simple sense that the experience of recession sucks. But, people say, there are lots of bad experiences and this is just one of them. Sometimes we have to suck it up.

My argument is no, this isn’t just another bad experience. Its a failure of our most basic institutions and is leading to pure loss.

It would be as if the door to your apartment was ripped off and heat was spilling out into the atmosphere and people said “Well you know sometimes you have deal with the cold, lets talk about the ideal size of an apartment. Big ones are draftier you know. No small ones cool down too quickly”

What! No! Lets fix the fucking door. Do you understand: the door is missing. This is not the time to argue about ideal apartment size, this is the time to keep our heat from spilling out purposelessly.

I was going to say that the media has a tendency to talk about recession as something that just hurts people’s fee-fees, like the BurlingtonCoat Islamic Center, but in fact the discussion is much worse than that: when recessions hurt fee-fees, they build character — look at the Greatest Generation! — whereas the BurlingtonCoat Islamic Center is a debilitating, irreversible blow to the delicate spirit of Real Murka.

Right now, a few percent of the population is likely being doomed to a life of chronic unemployment. From the discussions politicians and elite media are having right now, I can only conclude that they just don’t give a fuck about that.

About That Free Market

Something I’ve been tossing around the last couple of days while not ranting or stressing is that it has occurred to me there are differing conceptions of the free market. To me, when I say the free market, I think of people being able to freely and openly share their wares, to purchase what they want and need, and with some degree of happiness on both the buyer and seller’s end.

It seems to me, though, that the folks who most discuss the free market and are the biggest free market advocates just don’t see things that way. They sort of view things much like the “pain caucus,” who seem to be unable of thinking a policy is acceptable unless a majority of the nation eats shit in the name of patriotism and fiscal responsibility. Instead of viewing the “free market” as I have described it, their vision of the free market is an economy in which those with power are able to freely fuck over everyone else. The free market needs energy, so those of you living in towns with your water polluted by mine runoff can fuck off and die, because any government intervention messes up the “free market.” The market demands oil, so Allah forbid we get in the way of oil spills that might ruin the Gulf forever- witness the freakout over a mild cessation in deep sea drilling by “free market” advocates. The free market advocates that there be Randian geniuses who vacation at the Hamptons after fleecing people who tried to do the right thing investing.

In short, it has become obvious to me (belatedly), that when a lot of free market advocates talk about the free market, what they mean is the right to fuck people over with no recourse. Hey- you should have invested better! Hey- you should have known those Iowa eggs were shit! It seems as if in their minds (and I’m thinking of total shitheads like Welch, Gillespie, and McMegan), there simply can not be a free market unless someone is getting screwed, which is completely contrary to my understanding of the “free market.” In my understanding of the free market, things are a win/win scenario, not a tilted table with a win/lose situation where the winner is predetermined by influence and power and connections and societal standing.

It’s just crazy and a really warped way of thinking, and it turns everything on its head. Maybe this is why there is such a resurgence in buy local- you deal with your producers, and know what you are getting. I dunno.

Like I said, just babbling.

Food Bubbles & Starvation by Broker

I never got around to finishing what was intended to be a thoughtful commentary on this Harper’s article, but since John posted about this earlier, I’m going to give you all the link, at least. Frederick Kaufman, “The Food Bubble: How Wall Street starved millions and got away with it”:

Agriculture, rooted as it is in the rhythms of reaping and sowing, had not traditionally engaged the attention of Wall Street bankers, whose riches did not come from the sale of real things like wheat or bread but from the manipulation of ethereal concepts like risk and collateralized debt. But in 1991 nearly everything else that could be recast as a financial abstraction had already been considered. Food was pretty much all that was left. And so with accustomed care and precision, Goldman’s analysts went about transforming food into a concept. They selected eighteen commodifiable ingredients and contrived a financial elixir that included cattle, coffee, cocoa, corn, hogs, and a variety or two of wheat. They weighted the investment value of each element, blended and commingled the parts into sums, then reduced what had been a complicated collection of real things into a mathematical formula that could be expressed as a single manifestation, to be known thenceforward as the Goldman Sachs Commodity Index. Then they began to offer shares.
As was usually the case, Goldman’s product flourished. The prices of cattle, coffee, cocoa, corn, and wheat began to rise, slowly at first, and then rapidly. And as more people sank money into Goldman’s food index, other bankers took note and created their own food indexes for their own clients. Investors were delighted to see the value of their venture increase, but the rising price of breakfast, lunch, and dinner did not align with the interests of those of us who eat. And so the commodity index funds began to cause problems.
Wheat was a case in point. North America, the Saudi Arabia of cereal, sends nearly half its wheat production overseas, and an obscure syndicate known as the Minneapolis Grain Exchange remains the supreme price-setter for the continent’s most widely exported wheat, a high-protein variety called hard red spring. Other varieties of wheat make cake and cookies, but only hard red spring makes bread. Its price informs the cost of virtually every loaf on earth.
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Good News for People Who Love Bad News

Break out the champagne, spending on healthcare is down:

The economic crisis in the United States has reduced the use of routine medical care, and the cutbacks here are much deeper than in countries with universal health care systems, researchers say in a new report.

Wrong About Everything

These guys are reaching Bill Kristol levels of prediction making:

As 2010 began, there was nearly unanimous agreement in financial circles on at least one thing: Interest rates were sure to rise during the year.

Quite to the contrary. As Labor Day approaches, interest rates have collapsed, plunging along with economic optimism.

That turn of events, which has shocked savers and stunned investors, appears to indicate that financial markets’ worries are turning in a very different direction from those of many governments.

The governments are seeking ways to bring down budget deficits, fearing that without austerity they could go so far into debt that they would never be able to borrow again. Investors in the financial markets seem to be much more concerned by the possibility of renewed recession and a general deflation that could send asset values and prices down.

Of course the reason governments are focused on deficits and austerity is that the Galtian geniuses spent the last two years screaming about the budget deficit and austerity or the bond masters would kill us all in our sleep. The entire time, of course, Krugman’s hair was on fire and he was screaming bloody murder, but since he is a dirty hippy, he doesn’t count.

So now, because the assholes who created our financial mess were then wrong about the way to handle that mess, we can look forward to even more economic pain. Another round of bonuses for everyone!