You might not know it, given all the ambient noise of the moment, but
beyond the torments of news and propaganda there is still something called the
nation. It’s more than just a political compact. Until not long ago it
was also a culture, an agreed-upon set of values, practices, and customs that
amounted to an identity: I’m an American. If you canvassed the crowd
in Yankee Stadium one summer afternoon in 1947, I imagine each person would
answer that way rather than saying I’m a wounded war veteran, I’m a WASP,
I’m an oppressed housewife, I’m a negro, I’m Italian, I’m a Jew, I’m a union
member, I’m a communist, I’m queer, I’m a rape victim….
These days, the hardships of history are shattering the nation and our
response politically has been to take refuge in a matrix of rackets. Most of
these rackets are economic, because it’s the essence of racketeering to
extract the greatest benefit possible from the object of your racket at the
least cost to the racketeer. In plain English, it’s an organized way of
getting something for nothing. The identity politics of our time is another
form of racketeering — extracting current maximum benefits on claims of
mistreatment, often bygone, specious, or only imagined.
And so one of the truly existential questions of the moment is whether
we’ll continue to be a nation, even geographically, and a lot of sentient
observers aren’t too sure. Apparently we’re not too sure we even want to be.
This is why the campaign slogan of Hillary Clinton, “Stronger Together,”
rang so false when the Democratic Party worked so diligently in 2016 to
construct separate identity fortifications and then declared culture war on
the dwindling majority outside the ramparts. And you’re surprised that Donald
Trump won the election?
Trump won by making promises that he’ll never be able to keep under the
current circumstances. The main promise was to restore the standard of living
enjoyed in bygone decades by former industrial workers and clerks. His
promise was based on a misunderstanding of history: the notion that the
industrial organization of daily life was a permanent part of the human
condition. You could detect by the early 21st century that this
was not so anymore. That was exactly why we tried to replace it with an
economy of rackets. When there’s nothing left, a lot of people are going to
try to get something for nothing, because there’s nothing else to do.
Hence, the financialization of the economy. In the 1950s, finance made up
about five percent of the economy. It’s mission then was pretty simple and
straightforward: to manage the accumulated wealth of the nation (capital) and
then allocate it to those who proposed to generate greater wealth via new productive
activities, mostly industrial, ad infinitum. It turned out that ad infinitum
doesn’t work in a world of finite resources — but the ride had been so
intoxicating that we couldn’t bring ourselves to believe it, and still can’t.
With industry expiring, or moving elsewhere (also temporarily), we
inflated finance to nearly 40 percent of the economy. The new
financialization was, in effect, setting a matrix of rackets in motion. What
had worked as capital management before was allowed to mutate into various
forms of swindling and fraud — such as the bundling of dishonestly acquired
mortgages into giant bonds and then selling them to pension funds desperate
for “yield,” or the orgy of merger and acquisition in health care that turned
hospitals into cash registers, or the revenue streams on derivative “plays”
that amounted to bets with no possibility of ever being paid off, or the
three-card-monte games of interest rate arbitrage played by central banks and
their “primary dealer” concubines.
Some of what I’ve listed above may be incomprehensible to the blog reader,
and that is because these rackets were crafted to be opaque and recondite.
The rackets continue without regulation or prosecution because there is an
unstated appreciation in government, and in the corporate board rooms, that
it’s all we’ve got left. What remains of the accustomed standard of living in
America is supported by wishing and fakery and all that is now coming to a
climax as we steam full speed ahead into Murphy’s law: if something can
go wrong, it will.
When all of America comes to realize that President Trump doesn’t know
what he’s doing, it will make last November’s national nervous breakdown look
like a momentary case of the vapors. What can go wrong awaits in markets,
banks, currencies, and the immense dark pools of counterparty obligations
that amount to black holes where notions of value are sucked out of the
universe. There is so much that can go wrong. And then it will. And then
maybe that will prompt us back to consider being a nation again.
JHK on Tucker Carlson’s Fox News broadcast last Friday night:
http://video.foxnews.com/v/5363878500001/?pla...1#sp=show-clips
Fourth and final book
of the World Made By Hand series
