naked capitalism

Dave Raithel says:

Yes and no – there are always those other “qualities” of things used in illustrative analogies. Is Bernanke exterminating Jews, Gypsies, Communists, and gay men and women? No. The link Yves Smith put to Economics of Contempt (http://economicsofcontempt.blogspot.com/2009/12/changing-my-mind-on-bernanke.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+economicsofcontempt+%28Economics+of+Contempt%29&utm_content=Google+Reader) probably best tropes my own sense of things – and I will say I do not concur with the author’s previous defense of those TBTF entities as necessary – unless of course one believes that market makers are necessary.

But she’s in the business, and simply has familiarity with details of matters that I still flounder to grasp – for simple unfamiliarity with the full sense of the lingua franca. She impales Bernanke on one horn or the other: Either he is incompetent, or he is one of the crooks (so in either case, looking out for the wrong people.) Out here in flyover country, I consider a third alternative: He really is an academic, and his only motive is to figure things out, and unfortunately for us, we are the experiment. Not bailing out Lehman was an experiment. There was no model sufficiently robust to predict the consequences of an action except reality itself. Arguendo, people saw bubble this and bubble that, and this connection to that; nobody had the predictive capacity of the sum total of actual consequences – at best, different people had better hunches, and those were grounded in the specifics of their own histories and dealings more than any grasp of modern finance and its relation to real economic forces – or so I suspect. The odd savant is irrelevant – nobody ever listens to them until reality proves them right anyway. (Isn’t this at the core of the break down of the “rational expectations” metaphysics of neo-classical economics? Rational people should have done what? And if so many people are not rational, and there’s a herd, well now what?)

I’m not one much to care for the intricacies of naked shorting some stocks – the issues that draw me here are the ones I found so succinctly put in the Gowan article I mentioned earlier: Still hunting the “proximate” cause, if you will:
“There is thus a rational, dialectical kernel in the superficial distinction between financial superstructure and the ‘real’ us economy. In what follows, I will first sketch the main elements of the New Wall Street System, and
briefly show how its crisis took such spectacular forms. I will then argue that, to understand the deeper roots of the malaise, we do indeed need to probe into the overall socio-economic and socio-political characteristics of American capitalism as it has evolved over the past twenty-five years.”

So like the author of Econ of Contempt, I mostly figure who’s there is mostly irrelevant. Consequently, what then matters is the politics of the game – since, as much as I detest politics, it is the form of the class struggle in bourgeois society. The non-nut jobs ought to be negotiating with Bernanke off camera, getting what they think needs to be done.