The Sublation of the General Strike

The question whether the general strike is a partial reality, or only a product of popular imagination, is of little importance. All that it is necessary to know is, whether the general strike contains everything that the Socialist doctrine expects of the revolutionary proletariat.

- George Sorel, Reflections on Violence

Since violence is clearly illegible as violent, we may as well admit that the type of violence known as "resistance" and "anti-capitalist" struggle will work with as much insipid, invisible, globe-engulfing force as anything like "capitalism".  Keeping in mind that the "capital" of Das Kapital is more an arche-principle of any organon, than the designation of any specific economic system, it might seem as if violence itself were in any case anti-capitalist.  The specific illegibility of violence as violent (our inability to identify all possible consumption as violent, for instance) leads us to the same equipollence we find surrounding so many concepts, such as sovereignty, perpetrator, terrorism, and roguishness.  So, of course, capitalism is auto-immune, as Marx and so many others have pointed out.  But, further, if its violence has failed to live up to the stupidity of our concept of the "event" as irruptive, as violent, then so, by any argument, must its self-violence.  

It is for this reason that the violent destruction of aggregate demand in "advanced" economies must be judged along the same lines as the violence of the general strike once was: not does it "work" (as if we could know what this means), but is its futurity proletarian?  Does it expect an aneconomy of the other, not knowing what it will be? In this way, and only in this way, is the myth of the general strike growing out of its long, long infancy...

Early halloween post: Skeptical Ethics and the Deflation of the Uber-bubble (Crashes of 1873 & 1893)

Wikipedia (the moment of telos of human intelligence) tells us:

That in May of 1873, just as the global economy collapsed, barbed-wire was invented, and Jesse James carried out the first successful train robbery.

[Aneconomy: What is taken, is also taken.]

and that in 1893: "The huge spike in unemployment, combined with the loss of life savings by failed banks, meant that a once secure middle class could not meet their mortgage obligations. As a result, many walked away from recently built homes. From this, the sight of the vacant Victorian (haunted) house entered the American mindset."

[Many are still vacant (in Philly, say); many more vacancies are being added (in Stockton, say). As long as territories (dwellings) multiply faster than people, the periodic bubbles will only continue to deflate the larger bubble of monumental history.Nice to think the spectrality of the haunted house as the hope of abandonment, rather than the abandonment of hope. Lets add the McMansions to the ranks of the scary-beautiful!]

How classist was the ideology driving the inflation of the debt bubble?

Not answerable beyond the simple affirmative, of course: "It was extraordinarily classist."  But still worth a comment.  The dominant, driving assumption (yes, assumption is drive, assumptions after all are assertive) was that the the species-being of humanity was a certain becoming-American and, distinctly, a becoming-European.  (The overarching becoming-Western doesn't work, as the mutual transatlantic contempt continues to alter these bourgeois territories enormously.)  It based the mechanism of this becoming on the continuing-to-be-American of British and American consumers specifically.  The desires of these particular joe-the-plumbers were to drive them to increase a debt-emburdenedness which they would, stupidly, honor.  This piggish consumption would cause the Chindians to engage in similar debt-based contractual obligations as they increased their consumption of meat, oil, and received opinions.  Instead, the Yanks defaulted and the Chinese saved.

No-recourse

This system broke down at so many points that it now appears with the arrogant, brutish naiveté of a medieval political theology.  You cannot secure against default and the withering of desire for tat; least of all by deploying a doctrine of human nature as deluded and constrained as that of original sin.

Yes, but will it succeed?

Feudalism, Hyper-capitalism, Socialism or Utopian Star Trekian paradise? Who knows.

In a move that could only possibly make sense for Britain (since it has an independent currency and Britain is the only country in Europe with no economy beyond banking and financial services), the ECB has declared economic war on the rest of the world's wealthy elite, and socialized the future bad investments of the wealthiest European elites by guaranteeing all interbank lending. If the coordinated move stokes inflation fears in Europe, fails to lower the TED spread, or even fails to boost the Euro in the near term, the dollar could go through the roof. Whether this will happen depends on several factors. If European banks start lending to each other, they will recapitalize themselves and each other by making bad insured investments - a backdoor recapitalization. In this case there could be a race between banks and countries within the Eurozone to make as many bad investments as possible. Sound familiar? Yes, because that's how we got here. If it works, inflation internally all around. But inflation of what? Commodities of every stripe have proved themselves too vulnerable to demand-contraction, housing is going to go into oversupply in the very near future - yes, even in Europe. At first, the tech profits look too hypothetical to re-bubble, but...Energy? Yeah probably. Energy: now there is some tech with material, non-hypothetical (and yet metaphorical) teeth behind its profits. And a sector that European xenophobes will love, because it can sustain a certain discourse of 'independence'. Or maybe they will just horde it all, and everyone will start fighting over benefits. We'll see.
If it doesn't work, and credit markets don't "unfreeze", the move is going to look both desperate and indestagflationary. The economy will look so bad in Europe, and everyone will assume that banks are so unstable, that money will flee to the dollar, especially if the economic news in the states continues to be bad, and if Paulson and friends opt not to inflate and socialize their way out of the crisis (the republican illiterati will almost certainly get their way with this).
All this in freak reaction to last week's markets: the worse the news in America, the worse the news in Europe, the better the dollar did against the Euro and the Pound. Gordon Brown and the ECB are trying to break this logic. Very risky considering how complete dollar hegemony is, and how deep the hatred for Europe is in an administration that is determined to have as much affect as possible while it remains in power.

Wither

If the withering of demand produces the withering of production, what produces the withering of demand?  Efficiency of production leads to the exhaustion of consumption.  Over time all production simply conquers demand. Some commodities never really recover from this.  Like parsnips and housing.  Other commodities, like prostitutes, energy and digital media storage, we have not yet had our fill of.

Most prominent among this later category is the commodity "service".  What is service?  Well, genealogically it can be nothing else than the entire terrain of the infantile, when we infants were being absolutely served, and when we were not being served, we were absolutely alone, and absolutely helpless.  This at any rate is the dominant experience dynamic of the terrorized, anxiously-attached, neglected modern infant.

So a technology that deflates service can only be therapy, and not just a cure for bougy neurotics, but one that makes them better parents....

Housing might never recover...thank God

There are signs that lenders are planning on never securitizing mortgages again, which would be in line with a general deflation of the sector a la media in the 16th and 21st century, food in the twentieth century, and textiles in 16th century.  UBS has given up on it entirely.  

Makes you wonder:  there was once a time when a text was tactile, was a  textile, literally.  And, of course, when the literal could be taken literally, as concrete and authoritative; and of course also a time or times when the author wielded authority, when he was a surety.  Surely these times are still now, and these things are still what they were, and not...but the materiality of their coding is not always understood...

How to force them to nationalize the rest...

I will be working mostly on finishing a philosophy project for the next two weeks, so I won't be posting that much...

But its worth reemphasizing how heterodox, how Maoist, and indeed even Hericlitean, the logic of this collapse is becoming.  The more money in, the more money out.  The greater the decoupling, the more hot coupling.  Inflation continually driving deflation, coordination leading to economic warfare between states.  The epistemic arrogance of economics is splintered and buried, based as it was on induction and non-contradiction.  

And to add more devilish, proletarian glee and suburban pride to the picture, here is more sunshiny news from the state that murdered capitalism.

Fragility of concept "europe": spectres of an era thought gone

The financial warfare taking place between European states at the moment (battling for foreign deposits, threatening snap independent bailouts and recapitalizations) has startling echoes of the trade disputes of previous centuries. Strategically, this could be important to Warschington if investors begin to perceive the Euro as a captainless ship. This would back the possibility of a scenario where we see a hyper-inflationary depression in Europe, and a deflationary collapse in the states. This becomes all the more likely, the longer Europe seems to trend down ahead of the US. Of course, the thought of recapitalizing the US banking system by printing dollars and then treating Europe like a gigantic corporate costco would be very appealing to certain elements, especially after the recent humiliations of the iraq war, etc. The ECB is somewhat hog-tied in its ability to respond, at least with inflation still looming. The Krug-monster is arguing that the virality of the crisis is essentially financial rather than commodity-trade-based. If he is right, it should be extraordinarily easy to write everything off on the US debt side and sabotage the Euro.

Money headed for energy, education, and tech areas of US

Shows us that the exceptions to economic demise look to be split between low-regulation "flatlands" like central texas, and highly skilled tech futropolises like SJ, ABQ, Denver, etc.  Also pickled northeastern brain vats like New Haven and Cambridge.  Also strong energy/processing zones like eastern texas.  Watching for a new bubble here will be interesting.  Everything contributes to the vague impression that what money there is is (I love using "is" twice to each other in a sentence) channeling itself toward a green, energy-bound messianism, while continuing to build exurban honkey-tonk sprawls where it is still cheap to do so (say, central tex).  Looking for both these trends to spread geographically as oil and commodities drop back out of the ether.

The next indeflation: NYT calling for a "localized energy" bubble

"By 2012 to 2013, our profits could be higher than many Fortune 500 companies."

Who could possibly be thinking this way in a month like this?  The article suggests that the venture capital surrounding green technology companies is a likely destination for non-risk-averse cash fleeing the bloated popped-corpse of real-estate. While it has landed mostly in commodities for the moment, it will flee, just as it has oil, as we see global demand for these commodities drop.  When it does, maybe it will indeflate this bizarre, intangible, inadequately theorized, and altogether ontologically-suspect "stuff" called energy.

House Prices and God

In keeping with the theme of anarchiving onto-theologico-political economy, consider this article from Wikipedia on MLEC  (Master Liquidity Enhancement Conduit).  An important excerpt:

The mark to model process is similar to certain tactics used to support the Enron accounting fraud, where assets were assigned values that benefited the company's bottom line. Many of the securities' valuations can be found in the company's financial report as illiquid and hard to value level 3 assets.

Krugman insists that the new bailout will be the same:  a fraudulent inflation of values.  Which values? Well, first of all, MBS (mortgage backed securities), and thus mortgages, and so houses themselves, the land under them, the immigrants who build them, etc.  The spectrum is quite broad...but the bottom line is that, like Enron, the federal government is trying to pervert and obstruct the progress of the deflation of value, by deploying the hegemony of a fictitious, and in every other way malignant, "model" of corporate and banking assets.  As JEBM describes, only by artificially engineering unaffordability can the labor market and economy continue to function in all its magnificent brutality.  If home prices return to traditional price-to-rent and price-to-income ratios, capitalism will lose the ground of its new feudalism:  the ground itself.  Land, and housing.  

The good news:  this keynsian idiocy can find no purchase (pun intended) in the current environment.  France is showing the future misfire of this technique best.  France cannot hope to inflate its housing market by pissing liquidity into banks, because the market has too much downward inertia, and there is no demand for overpriced mortgages in most of the country.  We will soon, I think, see that the same is true in the US, and that the attempted inflation of housing will not keep up with production of houses.  Why?  Because, as far as I can guess, much of the liquidity provided to banks, as well as any recapitalization through federal overpayment for their toxic assets, will be lent out to builders and landowners desperate to get to work again, and willing to work and build very very cheap, and en masse.  It will lead, perhaps, not to an inflation of housing, but a resurgence in building.  Banks are not stupid enough to inflate a no-recourse housing market ever again.  They will however invest in the growth of new, cheaply-built, squalor-contemporary communities in loosely regulated no-man's lands, with highly modular design, thereby turning the American housing market into a gigantic Malwart - the only difference now is that the Walmart is smaller than it will, and it more expensive than it should be. (it is target;)  

So coming back to political theology:  we are witnessing a skeptical crisis in the mythology of the infinite value of the dwelling, with millions of ticky-tacky houses as empty as an English church...

Nothing Succeeds Like Success: Prediction Markets, Democracy and Performativity

The performative logic of economics (I.e. that econometrics are determined by and in the analysis and perception of them, and through their market valuation, so that stock prices, for example, do not and cannot reflect anything like a "true value") has been obvious to anyone who is not so deluded by their own stake in the objective validity of their investments that their narcissistic defenses border on the far side psychosis.  All Soros' theoretical papers add up to this point, and one can assume that it is fairly well understood, in a fairly repressed way, by most economics professors around the world.  It is increasingly obvious that this performative logic is less appropriate as an object of passive, gazing, curiosity, and instead seems to be taking on an inertial quality which would seem to demand an aggressive, furrowed (itself performative) analytic.  In the interest of taking a step in this direction, we should observe how the U.S. presidential campaign polling data is beginning to behave like the prediction markets (like the IEM) that have been established to speculate on these campaigns:  No sooner does a candidate look certain to win, than his poll numbers start going up.  This is why, as these hilariously elderly gentlebloggers point out, the prediction markets have been more accurate than polls in recent years, while polls seem somehow to lag themselves. In this way, the campaign and the speculation regarding the campaign are aligned and both behaving like markets, and in fact not behaving like markets, but as markets, and indeed in a sense as a single market.  While it is by no means necessary that democracy should perform itself according to prediction, it seems now to only destine the future as an ecstasy of prediction: a will to make the likely happen.

The strange apparent difference between this and the stock market used to be the election rhetoric's apocalyptic tone, it's orientation toward the mad decision of an Armageddon on election day, over and against the the general economy, and the stock market in particular, the players in which focused on an infinite expansion of a few particular numbers taken to signify the possibility of potency (think of the cheering of the upness of the up on the trading floor).  No longer.  (if ever?)  These two previously distinct number cults (distinct, and yet recently so united against all justice) have aligned themselves toward armageddon.  Both slave ships turn and lose themselves sailing into a stormy sunset.  The arrogance of imaging that they can destroy themselves after all their crimes is immense.  Democracy knows its own fraudulence and terminal safety in the face of its performativity, does economics?