Stickybuffalo.com

Over at The Economist, my BFF notes the strange and wondrously-transformed political context in which, suddenly, “corn-ethanol subsidies are going to expire this year, and [...] no one is defending them.”

Which is remarkable not only for itself, but for the timing, as just before reading the above link I was thinking of a post along similar lines, after seeing this on the homepage of Cleveland.com this morning.

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Several years ago I came across a cynical enumeration of the “Six Phases of a Project” somewhere online; I saved it though I didn’t keep the original url. Oh well. I was thinking about these today:

Six Phases of a Project

1. Enthusiasm
2. Disillusionment
3. Panic
4. A Search for the Guilty
5. The Punishment of the Innocent
6. Praise and Honor for the Non-participants

I think it’s easy to see this same arc in a lot of human screw-ups, beyond just the workplace project context which I think they were originally meant to describe.

For example, isn’t this similar in a lot of ways to the international financial crisis and its fallout? First, enthusiasm for the bubble economy: this is awesome, we’re all getting rich, don’t listen to those Chicken Littles, real estate can only keep going up in value forever, just get in now! Then, disillusionment: oh, crap, it was a bubble after all. Followed by panic: oh god, no one can possibly repay all of these debts and apparently letting Lehman Brothers collapse didn’t shock everyone back into line and our entire financial system could really fucking disintegrate here.

Stage four, “a search for the guilty,” might not seem to apply given that most of the guilty got away scot free. But stage four has to be considered in context of the whole list, which clearly does not include “punishment of the guilty.” (more…)

Another gloomy item about our financial system appeared today at Reuters. (Seriously, Reuters. It’s like “doubt about casino capitalism: it’s not just for hippies any more.”)

The basic outlines are pretty much just confirmation of one’s general post-crisis pessimism, i.e. not enough has been fixed to really make the system more stable, and almost no one in politics is trying very hard to genuinely fix things, because the traders and swappers and other parasites make a lot of money from the way things are and aren’t shy about using that money to buy influence. A companion piece to an item I summarized earlier this year, in a lot of ways.

And it strikes me, amidst the feelings of woe and despair, that perhaps this is a good occasion to go on record explaining the nuances of another of those complicated, mealymouthed “yes-and-no” liberal positions, in this case regarding market capitalism. Maybe I can clear up a misunderstanding or two. (I wish.)

Basically, I think there’s a lot of misunderstanding, some but perhaps not all of it elective, about the difference between “important” and “beneficial” when it comes to Wall Street and capitalist financiers generally.

I have the sense that too many people hear criticisms of these actors and, like this guy, conclude that “capitalism is under assault” and immediately launch into arguments for why capitalism is great and why investors, traders, bankers et al. are essential to capitalism. And I just want to say guys, guys, whoa, you’re missing the point, here.

Very few of us liberals, progressives, Occupiers or other critics of capitalism-as-exemplified-by-Wall-Street really want to abolish capitalism. Any more than we want to revive Stalinist Communism. The world is a lot more complicated than just a binary choice between the two, as even a cursory understanding of the socioeconomic systems of any three or more societies will make fucking obvious.

Though, obvious or not, I think this is an important point to make, if of course a difficult one in a short-and-simple culture.

Look, self-appointed “defenders of capitalism,” most of us critics are pretty bourgeoie these days, even many of those who are currently in the midst of hard times. And most of us recognize the role that market capitalism has played in allowing so many of us to be bourgeoie. We know a thing or two about history, after all. Do you?

We generally freely acknowledge the importance of trade and investment and competitive market forces, especially here in America where we not only love our shiny consumer electronics but have a culture in which the startup entrepreneur is downright hip and cool. And we’re cognizant of the role which banks, investors, finance, in other words, “Wall Street” plays in making such things go.

But as I suggested at the beginning of all this, there’s a difference between “important” and “beneficial,” just as there’s a difference between theory and practice. We lefties (well, the informed among us) fully understand the benefits of market capitalism, of competition, of monetary incentive, etc. And we understand the importance to such a system of a financial sector.

This does not mean that every financial sector is at all times operating to the net benefit of society, or even to the benefit of capitalism itself.

Yes, in other words, we understand your argument that a productive financial sector is important to a vibrant, productive economy; the fact that a being a good thing is important to the operation of b which is a good thing does not mean that a necessarily is a good thing, however. The fact that a healthy financial sector has a big role to play in a healthy economy is, actually, why we’re uneasy about a distinctly corrupt and unstable-looking financial sector.

“This is our concern, Dude.”

Can I make this much simpler? Again, one last time, yes, even many of us liberals appreciate the importance of banks, investing, finance, etc., etc. to any vision for a healthy, prosperous society. We have a specialized world and there is a need for specialists to make decisions about where large amounts of money are invested, and the nature and customs of those specialists is important as is the system in which they work because it has considerable influence over where and how our society’s resources are directed. From this can arise the progress of tomorrow.

But like any people and system created by people, Wall Street too can become corrupt and misguided and ultimately dangerous rather than beneficial, and that’s an important concern precisely because a sound Wall Street is, just as the reactionaries insist, important. Really important. Very few people contest that; it’s in fact essential to even issuing warnings like this one:

If America can reform its banking sector, it has a fighting chance at a prosperous future. If it doesn’t, it doesn’t… without the institutional reinvention of finance, America simply won’t be able to create the future, because it will keep investing in yesterday’s already overleveraged, zero-social-return ‘ponziconomy.’

We’d prefer to create the future, and at present we’re still putting our money into the “ponziconomy.” We’d like to change this. This is a call to action for reform of Wall Street, not its shuttering. Really.

Hopefully we’re all clear on this, now.