Chaos: The New Normal

It could be a very interesting morning on Monday.  We will find out if the S&P downgrade was already priced into the Thursday crash of the Dow …or…if we can fall another 500 points or so by noon.  Aww, that mysterious market that rules our lives and dwells at the center of our civic religion is, well, so mysterious that nobody has a clue.

Early indications are not so great, however.  The Israeli market, which functions on Sundays, delayed it's opening by 45 minutes to avoid a panic but everyone still went misshugah.  When we last looked, it was down about 7%.  In the next couple of hours we will see how the Asian markets fare on their Monday morning.

The Dow, of course, is only one very unreliable indicator of how the real-world economy is doing.  It's been booming this last year as most Americans kept skipping ever backward, as growth sputtered and real unemployment stayed put at about 16 percent. The price of guard dogs for the rich went up to $320,000, however. Maybe that was market driver!

The deeper problem we face is not the rather sterile debate over whether Barack Obama has any backbone or not. It rather should be a debate, a challenge, amongst and to the American people over whether we want to continue living in a society of gross economic inequality and simply waltz into the abyss or if we want to come to our senses and fight for basic social justice and a future for our children.

In this regard, I am delighted to welcome back to the blogging community my USC Annenberg colleaague Jon Taplin who has unleashed a rip-roaring essay on this topic. I urge you to give it a full reading.  Here's a bit of teaser:

After Thursday's stock market crash, we find ourselves staring into the abyss of a potential double-dip recession. Republican's, having ignored the history lesson of the business lobby 1937 Austerity Push, which managed to push America back into depression, seem to be clueless to the fate of most Americans. Of course, As the New York Times reports, their financial base is doing very well and luxury spending is reaching new highs. But America's economy lives and dies on the confidence of the average consumer. In the go-go years of the late 1990's the concept of "mass affluence" and "affordable luxury" dazzled marketers into believing that "aspirational marketing" was the path to the streets of gold in which the majority of citizens would have 60" inch flat screen TV's running 500 channels of cable TV and 100 MBPS Broadband services, even if they had to hock their house to get it. But, as a new White Paper from Ad Age entitled, "The New Wave of Affluence" points out, "In 2011 however, in the wake of a massive reset, it appears that mass affluence may be a thing of the past." Ad Age goes on to suggest that marketers concentrate their attention on the 3% of the American population earning more than $200,000 per year, "who account for almost 50% of consumer spending." The esteemed Telecom analyst Craig Moffett, in a report titled "How the Other Half Lives" chose to look at the darker side of this picture. "After paying for food, shelter, and transportation, the average bottom-40% family is left with…. wait for it…. just $1,215 per year, or $100 a month, for everything else.  That's $100 per month for all discretionary purchases, telecom services, cable or satellite TV, movies…  and everything else.  Indeed, after Healthcare, the number drops below zero." A recent report on consumer discretionary spending from the Federal Reserve Bank of New York shows "this time is different." Going back decades, such spending had never fallen more than 3 percent per capita in a recession. In this slump, it is down almost 7 percent, and still has not really begun to recover.

There's  a lot more. One point Jon makes, in passing, is the level of mass consciousness around this core issue.  He has touched on one of my favorites themes: the two conflicting visions of a totalitarian society. Orwell's 1984 where Big Brother watches you and Huxley's Brave New World where you spend most of your time voluntarily watching Big Brother and putting yourself and your kids on Prozac.

It's this last option that really ought to be of concern to us, way beyond a Marxist fart-sniffing salon on whether or not Obama is a neo-con or a neo-liberal.  I want to know where the American people are as our society gets stripped and looted.

One uplifting note is to watch what is happening in Israel, of all places. Some 90% of the country is backing the largest street protests in national history — protests against basic austerity and in favor of basic social justice.

What a concept!