Norman Vincent Peale has a lot to answer for. His gospel – that the “power of positive thinking” overcomes all obstacles – infected the executive and investor class in the 50’s and was magnified by the conservative corporatocracy for the next 50 years. They institutionalized it and then grafted it onto their own beliefs, defining “positivity” or optimism as the fulfillment of their wish list. Since they tend to be bi-polar thinkers with little tolerance for, say, nuance, that meant that everything contrary to their beliefs became, ipso facto, “negative”. “Thinking positively” came to mean being positive about their ability to depress wages, subvert regulation, shove their expenses onto the govt and the rest of society (a la Wal-Mart) so they could pocket more of their profits, freely exploit the labor and resources of other countries without blowback, and so on.
Unfortunately, it also meant developing a rigid denial of the inevitable consequences of all that unrestricted self-interest. Global warming, economic stagnation and growing poverty for a majority of the population, peak oil, massive debt, Bush – all of those ticking time bombs and many more were simply denied recognition. “If we don’t see them, they don’t exist.”
That attitude has now infested Wall Street. According to the NY Times, this week’s rally is primarily the result of “positive thinking”.
As Wall Street rallied this week, it seemed that investors were taking comfort in the notion that the economy had become so imperiled by the crumbling housing market that it was forcing the government to finally mount an aggressive rescue effort.
Investors found reassurance yesterday in talk that the White House was brokering a deal with banks that could diminish a looming tidal wave of home foreclosures. Soothing words from the Federal Reserve earlier this week revived the hope that more interest rate cuts are on the way, drowning nervousness in a din of buying.
“The market now feels comfortable that the Fed has come to appreciate the severity of the situation,” said Robert Barbera, chief economist at the brokerage and advisory firm ITG. “The bad news gives you the blessing of lower interest rates.”
IOW, they’re congratulating themselves for having created a crisis so dangerous to the health of the national economy that they figure the govt will have no choice but to steal even more of our tax money to bail them out. The reality – that we live in the 2-tired system that they’ve created where the wealth is all at the top, much of it untaxed, while personal incomes are falling and you can’t get blood from a stone – is swept under the rug, ignored, or vehemently denied.
Looming large over the landscape is uncertainty about the size of losses still confronting banks and other financial institutions as they reckon with bad mortgages along with credit card debts, auto loans and the complex detritus of an era of loose money now over.
“It’s a sucker’s rally,” said Nouriel Roubini, a former Treasury official who runs an economic consultancy, RGE Monitor. “The market is essentially hoping the Fed can rescue the economy. But they are discounting the onslaught of really lousy economic news.”
But the lower [oil] price also reflects the view of investors who now expect a substantial American economic slowdown, which would ease the pressure of the rising demand for energy.
“The market is realizing how much of a train wreck the economy is right now,” said John Kilduff, an energy analyst at MF Global in New York.
Even the metaphor – and from a critic – is a form of denial. This wasn’t an accident. The economic train didn’t inexplicably jump the rails through no fault of theirs. They deliberately removed the track in order to sell it, then convinced themselves with “positive thinking” that the train didn’t really need tracks and would run just fine without them. Now that the train has crashed and the ground around it is littered with bodies, they are – like all spoiled elites – blaming the victims and assuming their butts will be saved from facing the consequences of their despicable selfishness.
The “era of loose money” was always based on denial. And debt. Millions are in over their heads after years of keeping the economy humming with borrowed money. Foreclosures are up – way up – bankruptcies are exploding, and buying has slowed to a crawl. Why? BECAUSE NORMAL PEOPLE DON’T HAVE ANY MONEY. It’s all at the top of the pyramid. Our credit cards are maxed out and our incomes never grew as we expected – and were promised – they would.
[M]any of the forces gnawing at the economy remain in place, and actually appear to be intensifying. The trajectory was reinforced by data released yesterday, which showed that Americans now have less money in their pockets and are less inclined to spend.
Personal income grew at a seasonally adjusted rate of 0.2 percent in October compared with September, the Commerce Department reported. That was only half the rate expected. Consumption grew a paltry 0.2 percent, dropping from the 0.3 percent increase registered in September. Construction spending plummeted at double the anticipated pace.
Look at that again: while executive salaries have been skyrocketing into the multi-millions, even for execs who have been responsible for massive failures, the incomes of ordinary folk went up a measly 2/10ths of a percent, 10X less than the rate of inflation, and they’re surprised we’re “less inclined to spend”. Gee, I wonder why.
Buried at the bottom of the page, though, is some confirmation of what I’ve been saying for 3 years – that the highly-politicized and unethical Bush Admin has been cooking job numbers to make the employment situation look considerably better than it actually is.
Perhaps more ominously, a government report released yesterday suggested that the number of jobs created in the spring was far smaller than previously assumed.
“Assumed”? That “assumption” was based on Labor Dept statistics passed along by ex-corporate lawyer and Bush devotee Elaine Chao, who oversaw their development and release. Ever since she became the Sec Labor, job creation numbers have been consistently misleading, each quarter’s stats having to be “adjusted” – lower – some time after their ballyhooed announcement, with that adjustment conveniently buried on the back pages, all but invisible to the major media. And therefore us.
Writhing under a mask of rising debt, we have been in a recession – us, not Wall Street, which has thrived on inflated values, stock manipulation, overseas exploitation, mortgage scams, and cheap accounting tricks – ever since Bush started bad-mouthing the economy as president-elect to justify his tax cuts for the rich. Finally, unable to make any more than we are or borrow any more than we have, the recession is threatening to hurt the very people who created it. Born in and nursed by denial and “positive thinking”, greed and disinterest in the social costs of greed are on the edge of sending the world economy into a tailspin. And the response from our financial masters, the geniuses of Wall Street?
More denial and wishful thinking.
Well, really, what did we expect?