Wall Street has gone
Humankind can’t bear very much reality. We live by myths. When myths fail, they destroy entire interrelated systems of belief. I have experience that directly in the total failure of the law in my criminal case.
Justice has been destroyed in America. The law is no more. I see that in case after case. The identical kind of collapse of sustaining myths is happening economically as the very basic laws that supposedly support and maintain our economic system have been abrogated in a series of actions that have dissolved capitalism’s myth.
Trust is the essence of commercial interaction. When it collapses, commerce collapses, and those daily tasks, that yesterday had been as simple as turning on a light switch, suddenly become problematical, requiring conscious attention and focus. Our present economic crisis, fuelled by a great intensification of greed, is a crisis of trust based on a lack of transparency.
“There is a complete lack of confidence,” said Jim O’Neill, chief economist of Goldman Sachs in London. “It’s the most extreme since the credit crisis began.” (International Herald Tribune, September 19, 2008)
Financial instruments have been created (trillions of dollars worth of them) that few understand and no-one can value, thus no-one knows who is solvent. Thus when the various central banks make money available, it is not being used for its intended purpose. It is frozen money that banks are putting into very safe instruments. Releasing money into such a situation (the Central Bank behaviour) is akin to pouring cold water onto a deeply frozen pond. It isn’t going to melt the ice.
But unless the banks now do thinks they are loathe to do, they, like Wagner’s Dragon Fafner, will sit on their hoard, and try to wait out the process, for any amount of money they lend out will diminish their cash reserves and could prove to be their financial undoing.
This behaviour will not solve the crisis. Only increased liquidity (flows of money, lending) will diminish the crisis, but to repeat, no-one knows whom to trust with a loan or how much their opaque assets are worth.
The re-establishment of trust, after a shock to that most precious of human traits, is a slow process, so there is no quick fix to the loss of trust.
Just think what happened after 9/11: Muslims were attacked at random; or during the Nazi invasion of Eastern Europe during World War II: Jewish families were suddenly brutally murdered by neighbours that had lived next to each other (their families) for hundreds of years. The disappearance of trust. Think on it.
Faces are pressed too closely to the screens that surround. Turn off all the devices that connect you for a moment. Bear the silence for a moment. Go to a quiet spot in your house for a few moments or a back yard if you have one and calmly reflect upon how in an eye blink, Wall Street is no more. Just reflect upon that fact.
Most are not taking it in. Until you take time to take it in, you will not experience the magnitude of what has just happened. The financial center of the Empire has vaporized in a very short historical moment. After almost 18 months of failure to face the disintegrating process that brought it about.
We were spoon-fed lies, ideology and fairy-tales while the rot spread. For eight years, we have been treated in a similar way by most of our leaders. The simple fact has become an ideological play thing of those who do not have our best interests at heart. It is time to slowly awake to the disaster that surrounds us.
Wall Street is gone and the image of Henry Paulson on his knees before the speaker of the house begging for her help, a master of the universe on his knees. Savor the image, but don’t gloat. The work ahead is immense and all hands must be on deck. O back to the screens slowly, and don’t let distraction get to you: Wall Street has gone.
When the protection afforded for risk becomes the basis of enormous risk, there is something wrong with both our economics and our language.
