Thursday, October 02, 2008

Stockholm Syndrome

Krugman writes:

On Olbermann a few minutes ago (that basement classroom with the heavy paper over the windows and camera sure has come in handy lately!) a phrase popped out of my mouth: “Stockholm Syndrome”, with regard to the bailout rescue.

...I think that Congressional leaders know that it’s a bad bill, but feel compelled to defend it, because they’re (rightly) scared of the financial consequences of a second rejection. And to some extent economists like myself are in the same position; I think I called it the “hold your nose caucus.”

So am I for the bill? Yuk, phooey, I guess so. And I’m very angry at Paulson for putting us in this position.

But as he admits, he knows the financial consequences of a second rejection will be another one day stockmarket tantrum, and the financial consequences of passing the bill will be far worse and longer term and are coming anyway. It's like he's incapable of really identifying the source and nature of the fear. Which is all about the Bush regime and its clique. Because really there are numerous reasonable things the US government could do to alleviate the global financial crisis and many more things it could do to alleviate the problems of the real economy. But everyone knows there's an intent to defraud the public, and says it obliquely, but then lapses into this irrationality of the spectacle, that is to say: well we know what they will do with this legislation is not the stated intent, but they will take advantage of loopholes and flimsiness of the bill to engage in a racket to strengthen a small group of financiers; if they do that, it will be disastrous. But - (shifting invisibly to the spectacle now) - we know if they were to proceed with the plan as advertised, as we are with fausse naivété to pretend now to believe, and buy up lots of illiquid but valuable assets from all those who have been promised such relief, then it may have some small effect but we can't be sure, but the belief that it might means passing the bill is also uplifting theatre to affect the sentiment of financiers, while rejecting it at this point, after dangling the goodies in front of their noses, is, as theatre, a downer. So we must pass the bill even though we know they won't use it to enact the advertised plan which may be "better than doing nothing" but will assuredly use it either a)to do nothing or b)to enact the scam which is certainly worse than doing nothing.

To say that the numerous reasonable programmes of socialism for the rich, capitalism for the majority, which were always expected of the State, and undertaken on large scales as recently as the S and L bailout, are now "politically impossible" is to covertly acknowledge there is a radical aggressive agenda here the nature of which we dare not even contemplate, and to admit we are at the mercy of a lawless, ruthless, armed, wholly unscrupulous ruling class of whom we are in very serious terror. This would fit in with the other meme of "third worldisation" of the exceptional US of A, where things like this are not supposed to happen; where the influential educated indoctrinated elites of the lower bourgeoisie are not supposed to be terrified of displeasing the most powerful bloc of the ruling class when performing their usual function of reproducing the status quo.


  1. in kurgman's comments:

    "Paul, if your house was on fire and someone came up with a gas can and said he would throw the gas on the fire and it would put out the fire because it is wet … would you let him do it?

    Alright, I am not a yahoo and and I don’t subscribe to Mother Jones, either … but it is clear to me the risks of the this bailout being passed and the economy failing anyway far exceed the risks of carefully crafting a bill the actually accomplishes something useful.

    There are other forms of capital besides money. If the bailout fails, it squanders one form of capital thing that the government still possesses this minute, institutional credibility. If the bailout fails, the US government may as well take a permanent cruise to Antarctica.

    The government would actually gain more credibility by refusing to consider any actions until after the elections. The markets would go to sleep until the middle of November. The panic would subside and some hearings could be held in the interim.

    This crisis has a trust element. It is effectiveness, not exertion, that stimulates trust."

    — Posted by steve from virginia

    "Like many people who have 401Ks or pension funds it scared me when it when down so far and it is still lower than a year ago; so with self-interest and regret I am for it.

    Now if I had enough gold bars under my bed…I might have been for beefing up unemployment, helping primary home owners and putting huge sums into green energy development."

    — Posted by David B. Fisher

    "People get the government they deserve.
    We as a society have too many amongst us who are simply ‘apologists’ for the short-coming of our institutions. I do not believe Congress had no other choice than to simply lard up something existing.
    The media reports the nations ‘lost’ $1.2 trillion when the Dow declined 777 points, but is absolutely silent on quoting ‘found’ $749 suddenly created 24-hours later via Tuesday’s 485-point re-bound? Why? Is it because such back-2-back fictitious numbers forces attention to the stupidity of parroting the first number?
    Yes, that’s it.
    The media should have taken the next step to focus on how the Dow is not a non-political barometer of the financial system’s health and therefore Congress is not justified and not excused in kow-towing to terms dictated by Wall Street.
    But…just silence on this. Or contortionist-type apologizing by some NYT columnists.
    How can us ‘thinking’ voters (but only the vertebrates amongst our group), decouple from this insolvent and sinking nation of deadweight non-vertebrates (timid thinkers and otherwise), aka NYT editorial board and certain columnists, clueless congresspersons and clueless administrations and their multitudes of clueless voters?"

    — Posted by Avl Dao

    "Stockholm Syndrome is where you start identifying with the terrorists who kidnapped you, right? Like when the working class votes for the plutocrats, because, hey, they might get to be rich themselves, if they give the last of their money to those obviously smart rich guys who already robbed them blind."

    — Posted by Pazuzu

  2. the last one is great but leaves out that one starts identifying as a survival response because one is scared out of one's mind and helpless and needs to believe or make-believe in the basic decency of those who have despotic power over one.