The cultural crisis of capitalism

David Brooks tells us that the cultural consequences of recessions are rarely uplifting and then goes on to suggest, quite rightly I think, that the next "big social movements" will come from the "formerly middle class", the victims of today's economic meltdown.  I'm not sure, however, that Brooks quite recognizes the seriousness of the situation. For him, today's "recession" is about the formerly middle class giving up the affordable luxuries of brands like Coach, Whole Foods, Tiffany and Starbucks and finding their solace in "older, heavier, more reassuring" Playboy Playmates. For Brooks, today's situation is a standard economic downturn like the recession of the Seventies and its cultural consequences have no special historic significance.

Unfortunately, Brooks may be underestimating the problem. As MarketWatch's Paul Farrell argues, there are 30 reasons why today's economic crisis will probably metastasize into the Great Depression 2 by 2011. I won't bore you with the first 29 reasons which are financially quite technical. But it's the 30th reason that is most worrying because it is a cultural cause rather than a consequence of the meltdown. Farrell quotes the 86 year-old former Goldman Sachs chairman John Whitehead who, at a recent Reuters Global Finance Summit, argued that America's economic problems will take many years to be resolved and will cost the country at least ten trillion dollars. The problem is so bad that poor old Whitehead is thinking about the downgrade of US government bonds before he goes to sleep at night:

"nothing but large increases in the deficit ... I think it would be worse than the depression. ... Before I go to sleep at night, I wonder if tomorrow is the day Moody's and S&P will announce a downgrade of U.S. government bonds.... It'll get worse because the public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs, all very costly and all done by the government."

Whitehead is right. In spite of the deadly seriousness of the crisis, there is a common delusion in America that the situation can be repaired through a new New Deal that won't involve any increases in taxation, but will magically be solved by huge government investment. It's the bipartisan no-pain all-gain myopia that got us into this dreadful mess in the first place. Both Obama and McCain clung to this lie because anything else would have meant certain electoral defeat. And this is why today's financial situation is so toxic -- at its root, it is a cultural crisis of democracy.

So let's go back to David Brooks' formerly middle class. These, of course, are the very people who have bought most fully into the convenient lie that they not only have a god-given right to lower and lower taxes but also have a right to government protection when things go wrong. So what happens if Paul Farrell is right and by 2011 we find ourselves in another Great Depression where the American government teeters on bankruptcy and tens of millions of people have neither jobs nor homes? What sort of social movements will emerge from this miasma? I suspect that these will be mass movements of rage characterized by an anti-government hysteria rather than by a nostalgia for the affordable luxuries of Starbucks or Whole Foods.

Comments

[Jason]

On the mark. I think the Depression 2.0 can be summed up in a quote from the late Studs Turkel interviews with people who lived through Depression 1.0. From a man who lived through the depression, "When I was sixteen I was not afraid to die. Sixteen year old's today are not afraid to kill."

[Stephen Smoliar]

Jason points out the ambiguity of your final sentence, Andrew. One reading of "anti-government" is the chronic desire to "throw the rascals out," no matter who the rascals in office happen to be. The darker reading is the total rejection of the entire system of governance, beginning with the Constitution and going down from there to every last nut and bolt. Rather than wasting our time on pap peddlers like Brooks, we would do well to become better acquainted with those who have studied the efforts to migrate anarchy from theory to practice, such as Hans Magnus Enzenberger.

We may also consider David Simon's work on THE WIRE, much of which addresses, both implicitly and explicitly, issues of governance in an urban drug culture (where sixteen year olds "are not afraid to kill"). For the most part Simon presents a latter-day tribalism, where domination reigns supreme over legitimation and signification; but he also examines the emerging need for inter-tribal "councils." At the same time he gives a nod to Isaiah Berlin's "Political Judgement" essay through a character who tries to apply lessons from a university classroom and experiences a short-time rise in his fortunes followed by a fatal descent.

I suspect that Simon also intended us to view addiction as both literal and metaphorical. The metaphorical reading is that Brooks' "formerly middle class" is still fundamentally a culture of addiction. If that is the case, then they will probably be too doped out to exhibit any signs of hysteria, let alone become the crazed bomb-throwers examined by Enzenberger in "Dreamers of the Absolute!"

[Vince Williams]

Paul Farrel said it all with this: "...ideology trumps common sense, reality and the facts".

Now we know that the Wall Street insider Henry Paulson warned the president and his staff at Camp David that over-the-counter derivatives could blow up in Wall Street's face, two years ago.

So they all knew and were complicit in this administration's continual assault on fiscal sanity and the corporeal health of our body politic, all this time.

In this economic climate we still have everything to fear from Wall Street and that great crooked bird-of-paradise in the White House until the new administration coalesces and implements policy.

Leaving aside Brook's flip dismissal of all present occasion for 'moral revival' (why not have a much-needed national self-appraisal, first?) and for any consideration of the real value of material extravagances to general happiness-- the economic crisis itself does present the real opportunities, much more so than any incipient promise of change in the refreshing persona of Barack Obama.

[Florian]

excuse my english writing mistakes! I actually think that the cause for economic crisis, both in the past and present have one fundimental cause. The cause is that people tend to see country's as different from company's, when in fact they are the exact same thing. they work the exact same way, but on a much larger scale. When you look at a country as you would look at a company and say: Is there money beeing wasted in here? the answer is always a big yes. If you were to fairly compare the efficiency of a country to that of an everage big company you would find a huge gap. Within a goverment all kinds of recources are spent on things that no company in their right mind whould ever consider investing in. It's the tragedy of the commons principle at work. The economic disasters both of the past and of the present are simply: Moments in time when country's went bankrupt due to bad management. witch means that al the individual divisions within the nations (the company's) go bankrupt as wel. Due to al kinds of deception (inflation, unfair trade, etc) goverments tend to create the illusion that their economy is healthy but the truth is that almost no country in the world is actually economicly healthy. Its just nearly impossible to see if you don't know how to look for it. If you honestly believe that greedy wallstreet punks and bankers corupted the economy you are vastly mistaken. True cause 1: Goverment is in many ways a brake on succes for most company's (and thus on the entire economy). due to regislation that is aimed on maximising tax income instead of company succes and fair competition. true cuase 2: goverments spend billions on projects that are designed to impres voters and shun to do the harsh things that are sometimes just neccesary for the succes of the economy.