Jim, I tend to agree with you that our B-schools produce a lot of blinkered thinking:
"shameless academic mandarins caught on camera trying to weasel out of their greed-driven misdeeds"
On the other hand, last week I had lunch with a prominent academic economist. He shocked everyone at the table with his belief that our economic system, since long before the Crash, has been based on hallucinations and that the "recovery" is as fragile as a 100-year-old dowager with a bad cough.
He did not sleep the week after the Japan catastrophe. He also believes that it will only take one such event to lead to a new and deeper Crash, including an American default. It does not make the papers, he noted, that the Fed is quietly buying back Chinese-held US debt so keep America from collapsing. China has lost faith in the idea that American debt is worth a thing, he claimed. We just don't know it yet.
He says to watch two indicators: the value of the dollar vs. a market-basket of other currencies, and the price of oil, to see where the nation is going.
And yes, he understands and accepts the premises of Peak Oil. Maybe we'll get a new breed of economists in a future who understand scarcity and help others understand it. If we have universities.
Over lunch this guy stunned his listeners (but not me) by saying it's over, essentially. His students don't want to believe him when he tells them "the US will have to default on its debt. There is no way to repay it through either tax hikes or spending cuts. We are screwed."
Those Millennials had best learn some 19th century skills and stop texting on their smart phones.
I'll only disagree with you on one count: we may, in time, see Bernanke and his ilk less as cowards and shills and more as sad and doomed figures who knew the lumpenproletariat were not ready for the hard truth.
I think these financial kingpins in government will be recalled, in whatever histories we write in 200 years, as desperate men who tried to prop up a doomed system, based upon promises and emptiness, that took them down with it.
28 March 2011
I love this comment from Clusterfuck Nation this morning. It's how I feel, EXACTLY. The comments were made on the topic of James Howard Kunstler's review of Charles Ferguson's documentary, Inside Job.