Support the IEET




The IEET is a 501(c)3 non-profit, tax-exempt organization registered in the State of Connecticut in the United States. Please give as you are able, and help support our work for a brighter future.



Search the IEET
Subscribe and Contribute to:


Technoprogressive? BioConservative? Huh?
Quick overview of biopolitical points of view




whats new at ieet

Bitcoin and Science: DNA is the Original Decentralized System

Summa Technologiae, Or Why The Trouble With Science Is Religion

Technoprogressive Declaration - Transvision 2014

Transhumanism: A Glimpse into the Future of Humanity

Brain, Mind, and the Structure of Reality

How America’s Obsession With Bad Birth Control Hurts and Even Kills Women


ieet books

Virtually Human: The Promise—-and the Peril—-of Digital Immortality
Author
Martine Rothblatt


comments

Leah Carr on 'Technoprogressive Declaration - Transvision 2014' (Nov 23, 2014)

David Wood on 'Technoprogressive Declaration - Transvision 2014' (Nov 23, 2014)

Rick Searle on 'Summa Technologiae, Or Why The Trouble With Science Is Religion' (Nov 23, 2014)

Omar Immortalist Gatti on 'Technoprogressive Declaration - Transvision 2014' (Nov 23, 2014)

CygnusX1 on 'Summa Technologiae, Or Why The Trouble With Science Is Religion' (Nov 23, 2014)

hume on 'Technoprogressive Declaration - Transvision 2014' (Nov 23, 2014)

jhughes on 'Technoprogressive Declaration - Transvision 2014' (Nov 23, 2014)







Subscribe to IEET News Lists

Daily News Feed

Longevity Dividend List

Catastrophic Risks List

Biopolitics of Popular Culture List

Technoprogressive List

Trans-Spirit List



JET

Enframing the Flesh: Heidegger, Transhumanism, and the Body as “Standing Reserve”

Moral Enhancement and Political Realism

Intelligent Technologies and Lost Life

Hottest Articles of the Last Month


Why Running Simulations May Mean the End is Near
Nov 3, 2014
(20732) Hits
(15) Comments

Does Religion Cause More Harm than Good? Brits Say Yes. Here’s Why They May be Right.
Nov 18, 2014
(19246) Hits
(1) Comments

2040’s America will be like 1840’s Britain, with robots?
Oct 26, 2014
(14544) Hits
(33) Comments

Decentralized Money: Bitcoin 1.0, 2.0, and 3.0
Nov 10, 2014
(8625) Hits
(1) Comments



IEET > Rights > Economic > Vision > Futurism > Technoprogressivism > Fellows > Jamais Cascio

Print Email permalink (0) Comments (3530) Hits •  subscribe Share on facebook Stumble This submit to reddit submit to digg


The New World


Jamais Cascio
By Jamais Cascio
Open The Future

Posted: Mar 30, 2009

It’s not often that we get to see an historical catalyst in action. This is no mere “bad recession.” All of the assumptions we have about fundamental elements of the economy, from finance to trade to efficiency, are increasingly coming under scrutiny. The shape of the global economy at the end of this period of economic transformation will likely be unrecognizable to those stuck in the previous paradigm.

What will this new economy look like? Good question—I don’t think anyone knows yet. But it won’t just be 2005 plus a few more regulations, or even 1939 with a digital upgrade. It will very likely be something entirely new, something that will take some time to understand or even characterize. I have a very tentative guess, but I’ll post that tomorrow.

The scale of this situation is clear from the language we use. Mere “depression” doesn’t seem to capture the sense of danger. Bruce Sterling catalogued a few examples in mid-March, with “Econopalypse” and “Collapsonomics” of particular note; I wouldn’t be surprised to see “Financeageddon” show up at some point, too. (Sign of how my mind works: the first term that popped into my head was “Cha-chingularity.” I doubt anyone will pick that one up.)

I’m not deeply trained in economics, so much of my thinking about this situation has been focused on getting a better understanding of what’s happening. I suspect that some of you are in a similar state, so let me pass along some of the better pieces I’ve found over the past few months. Links and excerpts in the extended entry.

In December, 2008, Michael Lewis (author of the book that summed up the 1980s, Liar’s Poker) wrote “The End” for Portfolio. This offers a bit of history, as well as a useful exploration of just who was in a position to spot what was happening.

This was what they had been waiting for: total collapse. “The investment-banking industry is fucked,” Eisman had told me a few weeks earlier. “These guys are only beginning to understand how fucked they are. It’s like being a Scholastic, prior to Newton. Newton comes along, and one morning you wake up: ‘Holy shit, I’m wrong!’ ” Now Lehman Brothers had vanished, Merrill had surrendered, and Goldman Sachs and Morgan Stanley were just a week away from ceasing to be investment banks. The investment banks were not just fucked; they were extinct.

Matt Taibbi’s piece for Rolling Stone, The Big Takeover, is also useful. Taibbi starts to outline the extent to which the financial industry has captured the US government (and, more generally, wester post-industrial governments in general). This is a vicious telling of how this came about, with an emphasis on understanding the politics of the situation—not in a partisan sense, but in a power sense.

In essence, the bailout accelerated the decline of regional community lenders by boosting the political power of their giant national competitors.

Which, when you think about it, is insane: What had brought us to the brink of collapse in the first place was this relentless instinct for building ever-larger megacompanies, passing deregulatory measures to gradually feed all the little fish in the sea to an ever-shrinking pool of Bigger Fish. To fix this problem, the government should have slowly liquidated these monster, too-big-to-fail firms and broken them down to smaller, more manageable companies. Instead, federal regulators closed ranks and used an almost completely secret bailout process to double down on the same faulty, merger-happy thinking that got us here in the first place, creating a constellation of megafirms under government control that are even bigger, more unwieldy and more crammed to the gills with systemic risk.

Paul Krugman probably gives the best frequently-updated analysis of the situation, in both his New York Times column and his blog. His latest piece for the newspaper, “The Market Mystique,” takes a sharp jab at the notion that the financial market will eventually self-correct.

Underlying the glamorous new world of finance was the process of securitization. Loans no longer stayed with the lender. Instead, they were sold on to others, who sliced, diced and puréed individual debts to synthesize new assets. Subprime mortgages, credit card debts, car loans — all went into the financial system’s juicer. Out the other end, supposedly, came sweet-tasting AAA investments. And financial wizards were lavishly rewarded for overseeing the process.

But the wizards were frauds, whether they knew it or not, and their magic turned out to be no more than a collection of cheap stage tricks. Above all, the key promise of securitization — that it would make the financial system more robust by spreading risk more widely — turned out to be a lie. Banks used securitization to increase their risk, not reduce it, and in the process they made the economy more, not less, vulnerable to financial disruption.

Reading these pieces readies you for Simon Johnson’s “The Quiet Coup” in the May issue of The Atlantic. Johnson is a former chief economist for the International Monetary Fund, and he makes clear that he sees in what’s happening in the United States (and, to a lesser extent, Europe) as the same thing he saw in developing nations pushed to the brink of economic collapse: financial oligarchies running the show. And he has a clear prescription: root them out.

In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign. [...]

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy “stress scenario” that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.

Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

The New World emerges from the ashes of the old.


Jamais Cascio is a Senior Fellow of the IEET, and a professional futurist. He writes the popular blog Open the Future.
Print Email permalink (0) Comments (3531) Hits •  subscribe Share on facebook Stumble This submit to reddit submit to digg


COMMENTS


YOUR COMMENT (IEET's comment policy)

Login or Register to post a comment.

Next entry: Getting Our Priorities Straight

Previous entry: When superheros run amok: Exploring posthuman and technological themes in Watchmen

HOME | ABOUT | FELLOWS | STAFF | EVENTS | SUPPORT  | CONTACT US
SECURING THE FUTURE | LONGER HEALTHIER LIFE | RIGHTS OF THE PERSON | ENVISIONING THE FUTURE
CYBORG BUDDHA PROJECT | AFRICAN FUTURES PROJECT | JOURNAL OF EVOLUTION AND TECHNOLOGY

RSSIEET Blog | email list | newsletter |
The IEET is a 501(c)3 non-profit, tax-exempt organization registered in the State of Connecticut in the United States.

Contact: Executive Director, Dr. James J. Hughes,
56 Daleville School Rd., Willington CT 06279 USA 
Email: director @ ieet.org     phone: 860-297-2376