fiscal cliffs and financial stiffs

…The end is near. Doomsday scenario targeting that source of perennial anxiety and trauma:  The management of the American economy; now in terms of integrity officially in a recession, a double-dipper with  the entire money and banking system, the money bag kit and kaboodle officially in the realm of  the “Society of the Spectacle”, that influential life of its own phenomenon that marks a  succumbing to the forces of post-modernism and the higher ranges of the cult of celebrity. Call it fiscal washing. Obviously, this vast, campaign of self-conjuration is not finance or economics, or monetary policy since its impulses, its base instincts, its pecuniary reflexes are more inspired by modern marketing and aesthetics of economic management than by the long term geriatric and chronic pain management many would like to see.

---Greed — Pieter Bruegel the Elder---click image for source...

—Greed — Pieter Bruegel the Elder—click image for source…

A kind of Winslow Homer’s Snap the Whip of a new dawn of American prosperity.  As Guy Debord asserted, in this society of the spectacle, we inhabit a fantasy devoid of reality, and lack the skills to distinguish between the virtual and the real.  To Debord it meant the anchoring of an empire of modern passivity, an inertia, a paralysis over the disconnect between market economics and common and mortal grinding out the weekly pressures, while accepting as axiomatic, the image of a ruling economic order, benevolent or not that would be beyond dispute with the exception of some minor wrinkles and tinkling. Effectively, in his own way, Debord was not much less informed than snake oil vendors like Roubini and Krugman, and may have been more nuanced with his prescient view that publicity formed the only ideology, the importance of an ideology, the ideology of trade. Or as the Victorians would say, “to put a good face on trade.”

Henri Lefebvre once wrote of advertising as a poetry of modernity, which supports Debord’s thesis of the spectacle simulating reality into fake events, manufactured significance, erzatz steps toward some sort of redemption. It is hard to predict if the iconography of celbrity banking, of Greenspan and Ayn Rand  and “Helicopter” Ben Bernanke will reveal some form of religion in disguise, as is, the words tumbling from the lips of these high priests are scrutinized and valued no differently than the hairs cut from Brad Pitt or the metaphysical value virgin tears and wayward feathers from angel Gabriel’s plumage, but were getting there…

Kuspit:I might emphasize that I mean derealization and depersonalization in their psychotic sense: the postmodern society of the spectacle -- in which art is part of the spectacle and makes a spectacle of itself -- is a psychotic society. Derealization involves "an experience or perception of the external world as unreal, strange, or alien, as it were, a stage on which people were acting." Dare one say performing in a spectacle?---Read More:http://www.artnet.com/magazineus/features/kuspit/art-and-capitalist-spectacle2-8-11.asp image:Daily Mail

Kuspit:I might emphasize that I mean derealization and depersonalization in their psychotic sense: the postmodern society of the spectacle — in which art is part of the spectacle and makes a spectacle of itself — is a psychotic society. Derealization involves “an experience or perception of the external world as unreal, strange, or alien, as it were, a stage on which people were acting.” Dare one say performing in a spectacle?—Read More:http://www.artnet.com/magazineus/features/kuspit/art-and-capitalist-spectacle2-8-11.asp image:Daily Mail

(see link at end)…But there were some unusually personal questions, too. Bernanke was asked what the regular people in the part of South Carolina where he grew up (Dillon, S.C.) might do to prepare for and understand the economic impact of the “fiscal cliff” of tax increases and spending cuts that would descend absent Congressional action, come the start of 2013.


That led the Fed chairman to talk about what he called the economically “challenged” part of South Carolina where he was raised, and the importance of remembering the “reality of unemployment” and foreclosure on the folks who he hoped would be the beneficiaries through more employment opportunities of the Fed’s aggressively easy monetary policy.

Later, harking back to the South Carolina upbringing, Bernanke was asked why he didn’t have a Southern accent. His response was that he was “bilingual,” and the accent sometimes stirs itself when he is in the Southeast….

---Donald Kuspit:The society of the spectacle is a postmodern society, in that it has given up on external as well as internal reality, treating both as codified appearances. It has given up on what psychoanalysts call reality testing. Modern art grappled with both realities, dialectically teasing out their inherent esthetics -- the esthetics of their own dialectical relationship -- which became its own reality. Postmodern art subsumes modern art -- and reality, internal and external -- by reproducing it as a cultural code: one among many, and thus of no special consequence....Image:http://www.monkeytownhq.com/4_13_08.html

—Donald Kuspit:The society of the spectacle is a postmodern society, in that it has given up on external as well as internal reality, treating both as codified appearances. It has given up on what psychoanalysts call reality testing. Modern art grappled with both realities, dialectically teasing out their inherent esthetics — the esthetics of their own dialectical relationship — which became its own reality. Postmodern art subsumes modern art — and reality, internal and external — by reproducing it as a cultural code: one among many, and thus of no special consequence….Image:http://www.monkeytownhq.com/4_13_08.html

…And there was credit from a reporter to Bernanke for having coined the phrase “fiscal cliff,” which no doubt will be one of the most used American phrases in print and speech in the final quarter of calendar 2012. Did he still think it was the correct term, the chairman was asked at the press conference. Might not it be more of a slope?

Bernanke didn’t dispute the bon mot authorship, and stuck by cliff as the appropriate word. He said fiscal cliff was a “sensible term,” and detailed ways he thinks the U.S. economy already has suffered from the u


olved political debate. Consumer attitudes, business investment and hiring all have experienced some negative ‘cliff’ impact, he said.Read More:http://blogs.wsj.com/economics/2012/12/13/at-bernanke-press-conference-some-questions-get-personal/

ADDENDUM:

(see link at end)…But that’s not the only reason for the rising dullness of Fed policy. As time goes on, Bernanke’s controversial efforts are becoming less controversial—in large measure because they have worked. The guarantees and bailouts the Fed put in place in 2008 and 2009 have been unwound without significant cost to the public. Just this week, Treasury recovered the last of the funds it put into AIG. In short, none of the horrible outcomes that Fed critics predicted would result from Bernanke’s policies—the massive inflation, the high interest rates, the debased currency—have materialized. And so fewer people cry wolf, and those who do find their cries are increasingly ignored.

In addition, the Fed’s prominence tends to rise in inverse proportion to the strength of the economy. Read More:http://www.thedailybeast.com/articles/2012/12/12/ben-bernanke-s-federal-reserve-is-boring-again.html

---Krugman:Something I’ve been meaning to write: get into a discussion of matters fiscal, especially with conservatives, and you’re bound to have somebody declaring that we have a ONE TRILLION DOLLAR deficit, which means that what Americans want from their government is far more than we can pay for, so we must slash the welfare state, etc.. Also, that the hole is so big that taxing the rich can’t possibly make any real difference (although somehow savaging the poor supposedly will). So I think it’s worth pointing out just how misleading all this is....Put these things together, and the real hole in the budget is a lot smaller than a trillion dollars — in fact, there may not be a hole at all.  Read More:http://krugman.blogs.nytimes.com/

—Krugman:Something I’ve been meaning to write: get into a discussion of matters fiscal, especially with conservatives, and you’re bound to have somebody declaring that we have a ONE TRILLION DOLLAR deficit, which means that what Americans want from their government is far more than we can pay for, so we must slash the welfare state, etc.. Also, that the hole is so big that taxing the rich can’t possibly make any real difference (although somehow savaging the poor supposedly will).
So I think it’s worth pointing out just how misleading all this is….Put these things together, and the real hole in the budget is a lot smaller than a trillion dollars — in fact, there may not be a hole at all. Read More:http://krugman.blogs.nytimes.com/

———————–
James Rickards:Bernanke’s public attack on gold comes down to two propositions, both demonstrably false:

Gold cannot be used as a monetary standard because there’s not enough gold. This is one of the most frequent charges used by gold standard opponents. In fact, the quantity of gold is never an issue; the issue is one of price. There are approximately 31,000 metric tons of gold held by central banks today and another 130,000 metric tons in private hands. It is true that if this gold were valued at the current market price of about $1,650 per ounce, a money supply of equivalent value would be far less than the current money supply. This would be highly deflationary and probably result in a contraction of world trade and gross domestic product. However, the same quantity of gold valued at, say, $10,000 per ounce would support today’s paper money supply at a reasonable ratio of gold-to-paper in line with historic gold standards.

…So, the issue is not the quantity; it’s the price. Central bankers do not want to face up to the fact that they have printed so much paper money that a return to sound money would involve a one-time hyperinflationary spike in all hard asset values and a concomitant destruction of paper wealth. This adjustment will take place eventually—it always does. The issue is whether we will face up to the reality sooner than later in a studied and orderly way or wait for a disorderly and catastrophic day of financial reckoning. Read More:http://www.usnews.com/opinion/blogs/economic-intelligence/2012/04/30/the-real-reason-ben-bernanke-resists-the-gold-standard

 

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