> Seriously?
Yes. He's a smart guy who's reflected on this stuff for decades. I don't necessarily endorse his views on this article, but it is definitely thoughtful.
> But really - he's gone off the rails here:
>
>> The history of the latter decades of the 20th century, until the
>> present, is one of the gradual undoing of this working-class position
>> of strength and reversion of the balance of class forces to its more
>> normal state: a passive, apolitical working class and a healthily
>> (from the capitalist standpoint) valorized labor-power commodity. The
>> decline in trade union membership in the United States is a factual
>> symbol of this history.
>>
>> And standing in glaring contradiction to it is the emergence in the
>> USA of widespread working-class home ownership after World War II.
>> Reflecting the social advance of the working class, home ownership was
>> also central to the subsequent ideological derailment, as was
>> "consumerism," the suburban life style, and much else. But the
>> accumulation of personal wealth in the form of real estate was also a
>> growing threat to the classical proletarian condition, and therefore
>> an obstacle to the progressive re-emergence of unfettered capitalist
>> class rule. What was needed — again, from the standpoint of capital —
>> was nothing less than a new re-dispossession of workers on a large
>> scale. From this standpoint, the crisis — for capital — is the
>> advanced social and political position of the working class that
>> emerged following the mobilizations related to the world wars, the
>> Depression, the victory over fascism — and the continued existence,
>> and threat, of the Soviet Union. The resolution of the crisis is
>> re-proletarianization, much more advanced in the USA than in, say,
>> Western Europe.
What exactly stares at you as off the rails in the previous paragraphs?
>> Now the question — how much debt leverage is possible? — seems
>> unanswerable, unless we bring in the balance of forces cycle (the one
>> that, as noted, many Marxists have trouble with). Why, for example,
>> when the mortgage market showed signs of trouble last year, was a new
>> securitization not possible? Tension in this market has been on the
>> rise for years, after all. The answer may well lie along these lines:
>> Repackaging and underwriting of the bad loans was possible, in
>> principle; it would simply have required the sort of lofty thinking
>> and long time horizon that goes against the grain of capital — like
>> chimpanzees standing erect on two legs for short periods — but can be
>> accomplished by them through use of the state apparatus. What
>> happened, however, is that powerful ruling circles in banking and
>> finance (and politics) concluded that the housing crisis should not be
>> further postponed; that it was now both necessary and politically
>> possible. The crisis of homelessness in the U. S. working class is
>> precisely the assertion of a central capitalist imperative:
>> reproduction of the proletarian status of workers ultimately requires
>> their propertylessness (2). This need not be thought of as a simple
>> conspiracy: it is rather that the balance of forces have evolved, in
>> what from our standpoint is an unfavorable direction, to a point at
>> which powerful players in the financial markets, and in government,
>> now think the consequences of saving low-income home ownership are
>> worse than the consequences of letting that ownership slide. This may
>> appear as nothing other than good financial decision making, but it
>> ultimately results from a shifting world balance of class forces, in
>> which the demise of the Soviet Union, while certainly not the only
>> factor, was nevertheless a crucial one.
>
> Who knew - that the Ownership Society was actually a socialist scheme for
> the decommodification of labor!
There's much stuff to debate on the paragraph you quote. But it may not be as silly as it may seem at first sight.
I haven't discussed this with David yet, but I had to read that paragraph a couple of times to get what I believe is his real point. I don't know if you and I are talking about the same thing, but I'm referring to David's thesis on the inflection point in the debt cycle.
This is how I rationalize what he wrote, although I may be off the rails myself:
Think about it: How is the momentum in a debt boom broken? Because it was a massive debt boom. I'm not talking about the single little straw that at the very end broke the camel's back. No, I'm talking about a slightly broader time frame leading to that camel's broke back point. Notice that you don't need to think of it as a formal conspiracy (David explicitly preempts this interpretation). Not necessarily a group of big market players and top government officers meeting in a conciliabule and agreeing *formally* to let the ball drop. No.
The way I'd put it, which is not necessarily antithetical with what David wrote, is that for the momentum of the debt boom to be broken, you need a *critical mass* of money shorting it. It cannot be just a tiny bit of silly money shorting the market. I believe it was JK Galbraith, in his book on the crash of 1929 that made this point first. If you go back and look at the news that preceded the debacle, there's little really outstanding that may have spontaneously and suddenly altered the mood of the market. There's a big disproportion between the news and the events that appeared unleashed by those news.
So what really happened?
It's not stupid to think of it as a *tacit* agreement reached tentatively but that turns decisive at some point among heavy market players, in a strategic dance with top government officers (because the U.S. government can make a bit of a splash, one way or another, in the debt market and if you decide to short you better are right about what the government's next move will be or else), as the event or quick series of events that tip things over.
One could object and say, hey, but isn't it more plausible that a *large enough* bunch of small market players are also capable of tipping things over, especially when the government has stated its sticking to a hands off approach in the markets? The answer is not a rotund yes or no. In fact, it is very likely that small players were leaders in the sense that they functioned as effective trial balloons in the market. But in a Darwinian sense. If they survived, then the strategy can be cheaper. But if we are talking about the series of events that precipitate the inflection, then -- think about it -- how is the many small players story agreeing (by chance, because they are small and an informal "conspiracy" at that scale is harder to pull off) more plausible than the tacit, not necessarily formal, "agreement" between a few but heavy market hitters and big government shots? Remember that if you're shorting the market against a serious momentum, you can be crushed in no time.
Yes, the market is huge, but among the heavy market players, the game is a bit more strategic and less parametric. It's a bit like the criticism against the war in the mainstream media. You wait for strong leaders to start the attack, to stick the head out and survive.
Leading is risky business, in politics as in finance. You can easily get burned. So you test the waters a little. You short Bush just a tiny bit here and there, nothing that looks like a regular pattern. But that's a wink wink to other networks or news shows, which may or may not follow suit. Once others start to shoot, then you can short a bit more. At some point, others get emboldened and follow you. Soon you are letting Olberman loose and hiring Rachel Maddow to host a show.
IMHO, that's what David means. But I'm really attributing views to him that may or may not be his. So I'll check with him. Just my $.02.
[It's late and can't reduce the size of this posting. Just returned from Manhattan. Went to see Che 1 and 2. Go see it. Anyway, even if you ignore typos and bad syntax, I won't guarantee that I'll agree with myself tomorrow. FWIW.]