Thursday, October 20, 2011

Occupy Wall Street

Occupy Wall Street is like a Rorschach test -- people read into it what they want.

A particularly fanciful take on this is from Venkatesh Rao, whose excellent blog I would recommend, but difficult book I might not. (Venkatesh -- if you ever read this, please do not judge the prior comment to harshly. It's more a reflection on the extremely high quality of the blog and the very difficult task you set yourself in the book, not an absolute judgment).

I was not familiar with Sterling's talk at PopTech, so "favella chic" and "dark euphoria" were new to me, and I'm grateful for the introduction.

Rao says, reasonably, that
I am surprised by the number of commentators who have switched from being dismissive to taking it seriously, simply because the thing has grown bigger and angrier, and we happen to be in the run-up for a Presidential election. Call me a cynic, but I don’t think the growth of the movement means squat. Here’s why.
Here's the "here's why", and at this juncture we part company:
It does not matter how many people demonstrate and pour out into the streets. This is not a problem that can be solved by industrial-age collective action models because the problem is the end of the industrial age. One side has collected the trophy and left the field, the other side is still on the field, trying to convince itself the game is still going on. The winners, and ahead-of-the-curve losers, are already setting up the playing field for the new game.
The problem is not the end of the industrial age, the problem is a lack of aggregate demand. We have a lack of aggregate demand because finance is mismanaged, both at the industrial level ("Finance industry") and at the Governmental level ("deficit spending" and "financial regulation"). The reason that finance is systemically mismanaged is because the academic paradigm of finance is simply wrong. Economics professors are not good at accounting, they consider it beneath them, so they simply do not know that their macroeconomic models do not follow double-entry bookkeeping and are therefore wrong.

Accountants don't notice that macroeconomics is wrong because they imaginationless grinds.

Venkatesh ends with
"[expect] a reboot the likes of which we haven’t seen since 1776.

Fasten your seat-belts. It is going to get far uglier than the #OccupyWallStreet gang realize."

Maybe, but maybe not. We have a vision of our future, and it's Japan, which never restored aggregate demand after their credit bubble popped in the mid 80s. Does modern day Japan strike you as having experienced a reboot, the likes of which we haven't seen since 1776? When you sip your Daiginjo-shu in Tokyo, are things really all that ugly?

OWS is better thought of as a popular protest, some of which is genuinely seeded by popular disgust with the financial industry and it's government compatriots, and some of which is engineered by reporters, academics, and left wing policy entrepreneurs who want a more Communist version of the Tea Party. The problem is, that this faction has already won--first in the 30s, and then again in the 60s. This, my friends, is the smell of victory.


Blogger death maiden said...

right, because after the fiery annihilation of legacy world, with millions dead and billions starving, the grizzled survivors are going to mass into squadrons and assemble behind greasy new-media marketing analysts holding cum-stained copies of "mirrorshades"

1:12 PM  
Blogger winterspeak said...

with the passing of gadaffi i expect this to start happening in tripoli any moment now.

1:25 PM  
Blogger Rich said...

The economic model that all entrepreneurs are aspiring to is the "Eat people" model, ala the book that Andy Kessler wrote.

For example, Craigslist replaces classified ads with a better, free alternative. Result: Typographers lose their work. Newspapers lose their most profitable business line, and close. Newsprint firms go bankrupt and fire employees.

Examples like this are EVERYWHERE. The best part is that it isn't particularly reflected in the economic statistics, because a free price can't be measured in dollars, even though the work output exists.

5:47 PM  

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