Naomi Klein on pest control

There's something about Larry

Sizing up the present moment along with one of its causes, Naomi Klein wants "…to banish Larry Summers…from public life." She would not go so far as to launch Summers into space or toss him into a nuclear reactor because doing either "…wouldn't be nice." Yet she does wish to deprive him of the power he often enjoys.

Her reasoning:

The criticisms of President Obama's chief economic adviser are well known. He's too close to Wall Street. And he's a frightful bully, of both people and countries. Still, we're told we shouldn't care about such minor infractions. Why? Because Summers is brilliant, and the world needs his big brain.

And this brings us to a central and often overlooked cause of the global financial crisis: Brain Bubbles. This is the process wherein the intelligence of an inarguably intelligent person is inflated and valued beyond all reason, creating a dangerous accumulation of unhedged risk. Larry Summers is the biggest Brain Bubble we've got.

Klein here identifies another instance of the misplaced adoration we moderns tend to have of mere technique and the powers contained therein. I say this because being smart like Larry Summers means having the capacities needed to ace tests and to make one's way up and through America's bureaucratized educational system; it surely does not mean the person identified as smart speaks the truth about anything at all. And it certainly does not indicate the smart person's willingness to speak truthfully when he or she does chat with the less able. More importantly, thoughts, no matter how well-formed, eloquently expressed and rationally grounded, are not identical to the matter they address. They are, even when they are at their best, representations of something they are not, something different, something non-identical. Consequently their truth content, assuming for the sake of the argument that they contain such content, may always be contested, and this possibility remains in effect even when they issue from qualified professionals with access to the best information and techniques.

Unfortunately post-war American history is dotted with the catastrophes generated by the "best and the brightest," "wise men," "masters of the universe," brilliant advisors of Presidents and others considered excellent and entitled to wield power. What this recent history, which has been decisively marked by a criminality born of America's messianic conceit, ought to teach us is this: Although a few among us are incredibly smart, their mere existence does not relieve us lesser souls of the responsibility to think and judge for ourselves, to make up our minds about what is the case and what ought to be the case. Giving these smart individuals power merely intensifies this burdensome responsibility on those who authorize this power. It does not unburden the comparatively powerless.

Obamanomics: Wrongheaded?

According to Mike Whitney, Obama's economic recovery program is very much wrong since it mostly looks set to apply additional monetary WD-40 to the credit market. Even the program's job creation component, the hoped-for byproduct of its stimulus package, means to provide coverage for the demand constraints now afflicting the economy. These constraints take the form of rising unemployment and underemployment, long-term real wage declines, massive personal debt, etc. Yet the stimulus wishes to undo these constraints mostly by incurring additional collective and personal debt. Whitney rightly emphasizes this point along with some of the consequences it entails:

The Obama economic recovery plan is a misreading of the real problem, which is not the availability of credit, but debt. Bernanke, Summers and Geithner are approaching the issue from the wrong end; they want to stimulate the economy through credit expansion and more red ink. This is just more of Greenspan's bubblenomics: the endless boom and bust cycle triggered by low interest crack sold to credulous speculators. The only ones who benefit are the Wall Street insiders….

It should come as no surprise that common Americans now rightly fear the consequences produced by their debt-driven consumption when their consuming will occur during an economic crisis, especially one which promises to be long and difficult. They rightly see the problem as a matter of providing for their personal security, which is, after all, their responsibility. It is because they are afraid and because their fears are rational that they

…will not lead the way out of this economic downturn. It's physically impossible. The country is undergoing a generational shift from profligate consumerism to thriftiness. Stimulus alone won't get people spending. Salaries will have to go up to make up for losses in retirement funds and housing prices; and the face-value of mortgages and credit card debt will have to be written down. Otherwise, spending will continue to falter and the economy will tank. No economic recovery plan has a chance of succeeding if it doesn't address these two key issues: higher wages and debt relief.

Naturally, the Federal Reserve does not want to deal with the underlying causes of the crisis. After all, they're in the credit-peddling business. The Fed's job is to generate business for the financial community, which means creating a favorable environment for credit expansion.

Indeed…. What the crisis demands is a national commitment to debt forgiveness and economic risk reduction for society as a whole, reindustrialization and even unionization! To be sure, a project with these features can only look Quixotic to most Americans.

In any case, the Fed and the government now in power care about more than just securing America's credit-peddling business. Among other things, they care about their internal and external authority, about social stability and system coherence, about their political legitimacy and America's military effectiveness. It is because they care about these specific ends that they must also master the numerous conflicts and related social costs the crisis promises to generate. Most notably these will include: The social disintegration typical of an economy boasting collapsing labor and consumer markets. From what, one might wonder, would most Americans draw upon to construct a collective identity, a sense of national purpose? What would motivate them to sacrifice their short-term well-being if they lack the imperial majesty of Pax Americana as well as immediate access to an abundance of goods and services? If neither guns nor butter are present, if America is not the City on the Hill, the exceptional and indispensible nation, then what? For, why would Americans submissively comply with the rigors of the American way of life if they lack the real and illusory benefits that were once part of that life? They would give their consent to their governors because they have a right to sleep under a bridge?