Sunday, March 22, 2009

Death-Spiral II

Warren Olney had another classic episode of To The Point last week, which I listened too while walking around Lyon's Fourviere hill on a sunny windy day, looking at the Saone far below, the orange, peach, pale pink buildings of Croix Rousse, the kids climbing nets in the the trees, and noticing how peacefully normal everything was and could underneath still actually be.

But Banker's normal. This Olney show is a must-listen. Each of the four guests is brutally frank, and the upshot is a portrait of a credit card industry
  1. whose profits rest on a portfolio of nasty tricks built into their relations with customers;
  2. that isn't actually profitable enough to have saved their underlying banks from massive government bailouts;
  3. that is cutting off the public even as it accepts public bailout money
  4. that is sending the economy into what guest Robert Manning calls a death-spiral - an 2000s boom that was floated on expanding credit and not higher wages loses its credit, forcing consumers to cut back, forcing production cuts, forcing layoffs, forcing further consumption cuts.
Death-trips. New equation for your T-shirt: Bankers = Death

And no that is not a call to do violence to bankers. That is a description of what bankers are doing to the economy and hence to us.

It would be nice if economists had some ideas about what to do. They are starting finally to admit that certain kinds of solidarity, sharing, and cooperation are normal - not all economic choice is maximization in the context of a prisoner's dilemma. But it would be good if their attempts to acknowledge injustice didn't end with chimpanzees throwing cucumbers.

At least we have Fr. Frank preaching hellfire. Same for Maureed Dowd, who's column today has an excellent Readers' Digest version of the banker's network inside the Obama administration - it explains a lot about the O-limits. Given how things are, hellfire is little more than financial knowledge itself. See Jon Stewart confronting Mad Money's Jim Cramer with Cramer's dishonest peddling of a fake ever-rising market that took Flat-Wage America on a ride the infamous CNBC's Santelli blamed FWA for. And note Stewart's theory of the Two Markets, which is his polite way of describing class war.

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