Life in the Age of Electronics
The stock market
The stock market is falling. "Even with Wednesday's (7/24/02) about-face, the market this month [July] has lost an additional 14.6% of its value, and $1.7 trillion in stock-market wealth has evaporated, Wilshire Associates estimates." This from David Wessel's "Capital" column in the July 25 Wall Street Journal.
There are lots of other stats about the market fall. Here's just one: the index that tracks the price of the stock of 500 of the largest corporations (the Standard and Poor's 500) is at its lowest point since 1997. That means all of the rise in the past five years is gone. The market is back to the same spot it was in 1997. A rather strange trip.
While productivity is still going up thanks to computer technology, and Alan Greenspan encourages us that the "fundamentals" of the economy are still strong, the stock market changes can and are having a big impact on the economy. In particular, on people's attitudes.
Again, from Wessel's column: "The speed of the market's decline could magnify the ill effects. It's shattering what's left of public respect for American business and confidence in American capitalism. The headlines were disturbing enough. Now we have stomach-churning mutual-fund and 401(k) statements to make us feel even worse."
Thievery and fraud and lying in corporate boardrooms is one thing. It shakes confidence at a mental level, yes it's bad. Shame. It's another thing entirely when the thievery and fraud and lying costs someone their job. Reuters reported on July 2 that layoff announcements were up 12 percent in June; more than 400,000 jobs have been lost along with the implosion of the telecommunications industry.
And it's another thing when the thievery etc. torpedoes the life savings of workers and retirees. Half of American families are tied to the stock market in some way, mostly through pension plans or individual savings.
Both major political parties over the last twenty years -- Reagan yes, but Clinton, too -- have been busy destroying the social safety net. Those are the social programs like general assistance, aid to needy families, education funding and unemployment insurance. They have been busy chopping away at it. Retirement and security has been privatized and individualized -- you're on your own buddy.
Well now the moment is here where the lying, thieving captains of industry and finance are saying "fuck you" to the American people. Capitalism was never fair, and never kind. It is, and has always been, a vicious system, hard-wired to promote individualism and every person for themselves, to maximize profits. You're on your own buddy.
The miracle has been that the basic goodness of people, their natural compulsion towards cooperation (that's how humans are hard-wired -- it's in the chemistry of the brain, according to
an article in the July 23 New York Times Science section.) continues to shine through.
The faith of the broad middle -- those with jobs, or maybe retired, with some savings -- in capitalism can be easily shaken.
"A new Wall Street Journal/NBC News poll shows that, for the first time since George W. Bush took office, a plurality of Americans -- 42% -- believe the country is headed in the wrong direction. Fully 70% don't trust the word of brokers and corporations. One-third say they have 'hardly any confidence' in big-company executives -- the highest proportion in more than three decades. Confidence in Congress is plummeting, too. Just 34% approve of lawmakers' performance, down from 54% in January." (WSJ, July 24, 2002)
This is the dangerous situation in which the Republicans -- and the Democrats -- find themselves. The American "democracy" game is played by getting those who sort-of believe that elected millionaires can represent them to vote for the lying thieving scum. But the millionaires have to deliver the goods, and right now, just the opposite is happening -- the repo man is at the door. Come congressional elections in November, it will be the economy again, stupid, unless Bush drags us into a wag-the-dog war.
According to another article in the July 24 Wall Street Journal (reporting on the survey cited above): "The 2002 market meltdown could turn into a historic turning point in American politics and regulation if two significant changes occur." First, the current crisis in confidence "would have to turn into a broader economic decline"; and second, a realignment in the political forces. The first you and I can't do much about, although for many many people, the decline has already hit them. The second one though...
Ideas, ideas, ideas. A new world is possible. We can do better. A lot better. The technology is there. The skills and the compassion is there. Where's the vision? What kind of new world? How about "a cooperative society that nurtures the peaceful, equal, and full development of all people"?
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