Well, friends, here is an arresting question: what is the focus of the sophisticated world as the summer begins to draw toward its close (here in the South, of course, the end of summer is at least eight weeks away, but nevermind that)?
Why — financial crisis, of course! What else could it be?
Leave aside the three week pastiche of a debate on US public finances. The liberals could have succeeded in preventing that from ever happening, and still ears attuned to finance capitalism would be ringing with portents and alarums.
Did you notice the drastic revision of Q1 US GDP? Ouch.
Did you notice the upward revisions in virtually every official measure of the Great Recession’s damage inflicted, such that we now know that even by official statistical conjecture we have not yet regained our output and standard of living of late 2007? That’s four straight years of decline or stagnation.
Or what about the horrid manufacturing numbers, which sector had for some time previous suggested the possible lineaments of a recovery?
And indeed, there remains the menace and shadow of the Old World, the slow-burn of European dissolution. Their banks, their shadow banks, their funds, their sovereigns — stark and staring before them stands the shocking specter of insolvency.
Central banks, meanwhile, careen toward impotence. The Federal Reserve could probably successfully connive at pulling the kind of staggering imposture some Leftists have of late recommended: coin seigniorage. But this they mean (I’m not kidding) a project to simply instruct the US Mint to mint a handful of, say, a $500,000,000,000 coins, put those suckers on deposit with the New York Fed, and walk away enough cash to balance the budget.
Does that idea shock you? Well, I have another shock for you: the deflationary forces of the global economy are so severe right now that even a move as stupendous as this “seigniorage” scheme would not introduce measurable inflation. At least not immediately. Why? Because so much money is being pulled out of the active economy of finance capitalism, by frightened investors and savers, that central banks can barely keep up.
Look at the poor pitiful Japanese and Swiss central banks, desperately flailing around in an effort to arrest the appreciation of their currencies, if you require a demonstration of the impotence of policymakers.
Well all of this is rather striking and even stupefying. I am reminded of my strong suspicions of confident prognosticators. No one knows what in tarnation is coming next. We may be at the crisis that finally ruins America; or we may be at the crisis that finally forces repentance and rebirth. I for one, still loving and cherishing America despite her sudden penury and incapacity, pray for the latter.
But the whole thing is vaguely reminiscent of Bob Dylan’s zany lyrical concoctions, ineffably American tales of capricious madness and irrepressibly erratic squalor. The fall of this plutocracy will be many things, but boring is not one of them.