This was my face when I fled unemployment into the comforting arms of grad school.
It’s been quite a while, nearly two years, since I’ve decided to post anything here. Deleting the content was quite therapeutic and all that, given how much has changed in the intervening time. Long story short: I’m DP, I live in Paris, France, and I’m an M.A. candidate in International Relations and Diplomacy. Not a bad life if you can get it.
OK, so the boring stuff’s out of the way. This blog is basically going to be a way for me to vomit all the crap I’ve been thinking about in school and on my travels into a forum that can be constructive and used to build my thesis. So what does that mean? Basically, I’m going to write about geopolitics–Greek defaults, Korean submarine warfare, diplomatic hissyfits, post-modern warfare (more on that later), etc.–with a particular focus on global finance and its deeply messy ties to contemporary politics. If something especially retarded from the US (like SB 1070 in Arizona) or someplace else (burqa ban politics in France) comes up, I’ll talk about that as well.
A year ago, I found myself pounding the pavement, earnestly hopping from temp agency to temp agency and interviews up and down the East Coast searching in vain for a job that simply wasn’t extant. The reasons why were pretty obvious–I was an inexperienced college graduate from a good school with a GPA that spelled “slacker” in bright neon letters in the worst job market since the Great Depression. At my nadir, I found myself trying to justify to myself paying $300 I didn’t have to a job agency to obtain a $13/hr job as a security guard on Wall Street. Shit sucked. While the transition from unemployed schlub to Parisian scholar was a rapid and welcome transition that shouldn’t have brought about much reflection other than thankfulness for my deliverance, the question of why this all transpired has continued to circulate in my head to the point that I’ve decided to make it the basis of my thesis topic. Bitter much? Yes, but that’s besides the point–what’s more important is that the same sort of shenanigans that created so much anguish and havoc across the world the last two years is replicating itself anew without so much as a peep edgewise. While the hooligans at Zero Hedge and Paul Krugman may quibble with that assessment, it’s not really far off the mark–my math tells me that we’re three years into this mess, and basic reforms that would begin to address the myriad problems with the financial sector in the United States and elsewhere are yet to be enacted. Why?
I’ll spend the better part of this week addressing that question, but for this posting I’m going to address the philosophical underpinnings of the policy regime in the US and elsewhere that allowed this system to creep up in the first place. Though the effects of this crisis on societies across nations leads one to view such matters in practical, political terms, the reality is that the neo-liberal system we currently have in place is enormously dependent upon a particular philosophical outlook that shaped the policies that created this mess. When asked whether the crisis was avoidable, George Soros replied that it would have been possible, but only if there had been a recognition that the financial system,“as it currently operates, is built on false premises. Unfortunately, we have an idea of market fundamentalism, which is now the dominant ideology, holding that markets are self-correcting; and this is false because it’s generally the intervention of the authorities that saves the markets when they get into trouble.” The basic premise that markets are best left alone (in a particular interpretation of Adam Smith’s Wealth of Nations) to correct their own inefficiencies is itself based upon a series of assumptions that even a cursory glance at economic history can demonstrate is, at best, wrong–not to mention fucking retarded. One can pick any one of a number of examples from the distant (the tulip mania in 17th century Holland) to more recent (the Great Depression) past to attack in particular the notion of the rational economic actor.
The rational actor
Indeed there are times when people do not act in their own self-interest or make correct decisions about their self-interest is–perhaps because of these faulty assumptions or because of what legendary douchebag Alan Greenspan ironically deemed “irrational exuberance.” This inherent volatility in economic markets, along with the more natural ebbs of flows of the business cycle and stock markets, creates a situation where a quite visible hand—that of the functioning government in all its regulation-wielding, banhammering glory—is needed to both shelter the public from the more pernicious effects of such instabilities (like when I literally couldn’t buy a job). While one can legitimately make a persuasive argument that it is doubtful that the government will do a good job if left to assume these responsibilities (in fact, there’s no way in hell they will), our recent experiences dictate that this remains preferable to the alternative…which is letting the same thing happen again.
Next time, I’ll discuss credit-default swaps, collateralized debt obligations (wat), and other financial weapons of mass destruction. A bientot.