by William Skink
We are on the precipice of a “correction” in the stock market. How’s that for semantics? After years of zero interest liquidity pouring into banks like booze down an alcoholic’s throat, it’s about to get real ugly again. When alcoholics who can’t quit are at the end-stage of their disease, going cold turkey can kill them. If Yellen holds to raising interest rates next month after 6 years of a liquidity bender, which no one of course expects the Fed to actually do, ugly could get catastrophic.
There’s another malady many Americans suffer from: American Exceptionalism. I hope The Polish Wolf keeps writing, because he’s such a great example of this debilitating mindset.
Case in point, a post up today, titled China Beats the US at Neoliberalism.
It’s a curious post that takes China to task for propping up it’s crashing stock market with state pensions:
In an effort to boost its flailing stock market, and apparently learning nothing from the US experience, China has authorized local pension authorities to put workers’ pensions into national stocks, bonds, and derivatives. This is in fact a much bigger deal than the same thing happening in the US (where local and state level pensions have been playing the stock market, and not always winning, for years), because not only does it strip away some of the last facades of socialism from China’s capitalist core, but this affects virtually every worker in China, because unlike in the US almost all Chinese pensions are run through local bodies. This is risky to say the least, and seems to vastly widen the potential fallout of another financial crisis.
Since we are quickly approaching another financial crisis, it might be more helpful to figure out why instead of bashing China for going into damage control mode. If figuring out why is something you’re into, Michael Whitney has a piece worth reading about why China’s market volatility might not be the underlying reason for last Friday’s plunge.
That said, I do appreciate PW’s effort to cast China’s pension gambit as somehow beating the US at Neoliberalism (like it’s some sort of game) because he produced this gem of exceptionalist thinking (“It” refers to China’s ploy to prop up its stock market):
It also has implications for foreign policy, especially for those on both the far right and far left who are rightly concerned about the power of global plutocrats. If we’re really concerned about the spread of a ‘neoliberal’ mindset, which sees the government as merely an apparatus to appease the markets (what Paul Krugman brilliantly describes as the ‘confidence fairy’ theory of laissez faire economics), China’s willingness to risk its people’s pensions to re-inflate the stock market should be solid evidence, nay, proof positive, that a ‘post-American world’ will not have any more humane or less capital-dominated goals than an American one. While in Western Europe and increasingly in the US there is real resistance to this shift, China (and Russia), far from being bastions of resitance to neoliberal inhumanity, are out at the forefront of it.
I’m very familiar with this kind of argument, not because I studied rhetoric in college, but because I have a 7 year old that likes to say “but so and so did it to” when he’s caught doing something he knows he shouldn’t be doing. The evidence that someone else is doing the wrong thing as well doesn’t get him out of trouble.
Worrying about a post-American world is just bizarre to me. I don’t get it. Personally, I’m worried about a post-collapse world. And so are the uber-wealthy:
Super rich hedge fund managers are buying ‘secret boltholes’ where they can hideout in the event of civil uprising against growing inequality, it has been claimed.
Nervous financiers from across the globe have begun purchasing landing strips, homes and land in areas such as New Zealand so they can flee should people rise up.
With growing inequality and riots such as those in London in 2011 and in Ferguson and other parts of the USA last year, many financial leaders fear they could become targets for public fury.
The vast majority of humanity—Americans, Russians, Chinese and everyone in between—will be the ones left behind to suffer if things get really bad. At that point it won’t matter who beat who at Neoliberalism. It will be all about survival.