Commentary on Political Economy

Sunday 17 July 2011

"Fundamentals" Idiocy

Yet again we have to remark on the appalling lack of "comprehension" of the extent of the "crisis" that is happening and widening all around us like one of those bottomless abysses that one can see only in Walt Disney cartoons! I will refrain from using epithets that would be indelicate in the direction of those toward whom one should point not Wittgenstein's hot poker, but rather a bazooka!
I really have little time to indulge rank stupidity, but I will invoke Galbraith's apocalyptic allusion to "the march of events" that now threatens to run underfoot the bourgeois pygmies that stand in the way.
Here are a couple of clues. First, Clive Crook's Column on the Republicans which, as I have argued (too often!), exposes their own peculiarly insane brand of "in-comprehension" and that will soon consign them to the dustbin of history where they belong. Here is Crook:
You will note that Crook clearly perceives the "untenability" of the Republican position on the debt ceiling and - therefore! - the fact that "the fracture of the Crisis-State" will have to be remedied by a fresh "New Deal" without which capitalism will simply have no future.

The other illustration (even better) comes from Munchau who, rare among the pundits, has a keen sense of the "political" and of how absolutely and devastatingly "dependent" on "the political" and on its "timing" (!!) all this nonsense about "markets" and "bond vigilantes" and (most indecently imbecilic of all) "fundamentals" (!!) - how idiotic all this is. Just listen to Munchau and tell me if this is not exactly what we have been screaming for months now - first, in the sense that there is a "dys-synchrony" and "dis-connection" between the institutional and political asset of capitalist regulation "at the European level" and the functioning of European capitalist industry; and second, about how US monetary policy (Bernanke's Fed) is ruining the EU via exported inflation. Just read here: (Munchau on the euro)
“It is hard to comprehend why markets decided to panic over Italy at this particular time. There was a trigger, for sure, but Italy’s problems are not new. The country needs to grow by 2-3 per cent a year in the long run to be able to remain in the eurozone. Or it needs lower interest rates. The markets understand that Italian politics makes the first difficult, and German politics makes the second tough. If you accept the constraints of eurozone membership, low productivity growth, and high interest rates as given, Italy is insolvent. One of those constraints will have to give.”
If anybody, after having read all this, still comes back to me about "fundamentals", I will be sure to kick their "fundamentals" very hard indeed!! Cheers.

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