Tuesday, May 5, 2009

Reverse Cassandras by Tim Horras

For those of you who haven't read your Greek mythology, Cassandra was a prophet who is said to have lived during the Trojan war. The gods gave her the ability to predict the future, but doomed her to be ignored by everyone and made powerless to change anything.

Today we're faced with a glut of Reverse Cassandras.

What's a Reverse Cassandra? A Reverse Cassandra is somebody with the power to change things and who everybody listens to and heeds, but really this person doesn't have a clue and is promoting an innaccurate, rosy view of the future.

Emissaries from the global ruling classes have been telling us that we've hit the bottom of the economic downward slide. Fed Reserve Chairman Ben Bernanke said as much yesterday, President Obama has been talking for weeks about "glimmers of hope", the EU says we're no longer in freefall - the latter even going so far as to send the French minister of finance to that red-white-and-blue bastion of mainstream American liberalism, The Daily Show, to tell us that, indeed, we may have reached the bottom. Even the usually dour (neo)liberal talking-head Paul Krugman is seeing the "green shoots" of new growth!

But on what basis are they making these claims?

Now, I'm no trained economist, and I certainly don't have Cassandra's prescience, but I'd like to explain my reasons for thinking that these people are wrong.

Firstly, these people are career liars whose sole purpose is to mislead and keep down the working class.

That's an opinion, of course, but it's an opinion based on evidence. These folks bought into the neoliberal lie -- hook, line and sinker. In 2002, Bernanke said thanks to the guiding influence of that godfather of free-market fundamentalism, Milton Friedman, we would "never again" have another Depression-like economic crisis. As for Krugman, who is portrayed in the media as the far-left alternative to the status quo, you should remember that this was the same guy who thought that US monetary policy would solve all employment problems, and that folks who thought the financial and economic problems of the 1930s would repeat themselves were not "sensible people". [1]

From a more evidential perspective, having gone through the reports these bodies have published -- looking with all my little heart of hearts for the glimmers of hope -- I've found very few positive signs.

For example, the EU had to revise their predictions this month, because economic contraction has been shown to be twice as bad as they had expected. However, measures like consumer confidence are high. Well that's just great! Unfortunately, confidence has little to do with reality -- wages are likely to continue declining, meaning less purchasing power for workers, meaning even lower demand, etc. The only good news these days seems to be coming out of China, which even before the crisis was producing massive surpluses (literature on China is extensive, but David Harvey has the best analysis out there for my money).

So while the Reverse Cassandras tell us the sky is not, in fact, falling, the situation continues to get more and more dire.

If I haven't already made this clear, the existing ruling class in the US is incapable of getting us out of this mess. They're already preparing us for permanent, mass unemployment, as remarks by former Fed Reserve Chairman and current Chairman of the President's Economic Recovery Board Paul Volker indicate. According to Volker, the new, "natural" rate of unemployment will be much higher. If this indeed does come to pass, this will mean a jobless recovery which is even worse than those we've experienced before.

I'd like to end on a somber note. I'm currently reading Jeffry A. Frieden's Global Capitalism: Its Fall & Rise in the Twentieth Century, which is a flawed but comprehensive overview of global economic history from the late nineteenth century til 2000. I'm getting to the part right now where World War I has just ended, and the new postwar economic order is coming into being. This proves to be disastrous, and a young John Maynard Keynes goes on to write a best-selling polemic outlining its failures. The important thing here is this: the ruling classes of Europe failed miserably. They led their societies into a maelstrom of destruction and horror which lasted almost forty years, leading from world war to hyperinflation, to depression and world war all over again.

I leave it to the reader to draw any contemporary parallels.

After all, the only thing worse than a Reverse Cassandra is the genunine article.


[1] The reason I'm so adamant about pushing socialism to the forefront of the public debate, is that there needs to be another set of alternatives in the discussion about our collective futures. Our current range of options leave us with little room to maneuver -- from the psuedo-Keynesianism of Paul Krugman on the "left", to the "centrist" policies of the Geithner-Summers banking elite - fully backed by the administration of Barack Obama (policies which amount to a massive robbery of public coffers to pay off the bad investments of the financial class), and on the right, the Alice In Wonderland/living-in-a-fantasy world economics of the Tea Baggers and the Republican Party.


  1. The prospects of the U.S becoming socialist is extremely unlikely, even if the economic depression takes a massive turn for the worse.
    Building a broad progressive movement, one which will successfully push for incremental yet meaningful reforms. If we can be successful in pushing for single payer or a near single payer health system (public option) it would save and vastly improve millions of lives. With his pandering to the private health insurance industry Mr. Obama has not worked out comprehensive reform but a pathetic compromise. Agitating and or hoping for the a spontaneous victory of socialist thought in the public debate would, in my personal opinion, be a nihilistic exercise in futility and wasted energy. Socialism will never "sell", but the equity, justice, and rationality that only true democratic socialism can bring can be achieved through incremental, meaningful, if painfully painfully slow in coming reforms.

  2. When the average majority of Americans think of the term socialism they think of repression and authoritarianism, lack of individual rights and not the democratic, free, and materially abundant society, one in which all and not just the few would have the freedom to develop themselves fully as individuals and as human beings, that a truly democratic socialist society would entail.