The Onion is More Correct Than They Realize!
Today my sister Carol sent me a copy of an article from the satirical publication, The Onion, which she knew I would really enjoy. It is a hilarious faux-news item entitled “Recession-Plagued Nation Demands New Bubble To Invest In”. This article is so funny, and actually so thought-provoking, that I decided to post it on this web site at http://www.massline.org/PolitEcon/Onion/Onion-NationDemandsNewBubble080714.htm, and to add this short but serious commentary next to it.
The Onion article starts off with the sentence “A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.” It adds: “The current economic woes, brought on by the collapse of the so-called ‘housing bubble,’ are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.” They thus quite correctly point out that both the mini-boom in the U.S. during the late 1990s and the modest recovery that has occurred since the dot-com bubble (or “New Economy”) collapsed in 2000-2001, were both constructed on fantasies; that is, on bubbles that had no solid rational foundation.
While The Onion continues by “quoting” someone as saying “We are in a crisis, and that crisis demands an unviable short-term solution”, and “The U.S. economy cannot survive on sound investments alone”, it is clear that they think they are merely putting what they actually consider to be absurdities into the mouths of their fictitious characters. That is, the writers of this piece, and Americans in general, actually believe that the economy can and should be put on a more solid foundation, one not based on fantastic nonsense and more bubbles based on such fantasies.
But sadly, this implicit desire that lies behind the humor of the article is itself a fantasy. The real situation is that all capitalist booms and economic “good times” are actually constructed on bubbles. I explain why this is so at some length in my pamphlet in progress entitled “An Introduction to Capitalist Economic Crises” some of which is posted at: http://www.massline.org/PolitEcon/crises/Crises_0.htm, and especially in sections 2.9 through 2.11. The gist of that argument is simply that the workers are not paid enough to buy back all that they produce for the capitalists, and that therefore credit bubbles of one kind or another are absolutely essential if the economy is to be kept going.
The two most important and fundamental bubbles are consumer credit, and government debt (which is used to buy the “excess production” that the working class cannot afford, usually in the form of military weapons and supplies). On top of this there are various kinds of additional speculative bubbles that get constructed, such as real estate bubbles, stock market and other financial bubbles, and bubbles constructed around various other capitalist fantasies (such as the supposed New Economy based on the Internet which was supposed to be immune from the laws of capitalism).
The article in The Onion focuses on these speculative bubbles, but really the consumer credit and government debt bubbles are far bigger and far more central to the short-term success of capitalism. The shit hits the fan when those two basic bubbles reach their limits—which they now have just about done. And when one of these speculative bubbles pops at the same time, then there is a real danger of the economy spiraling down and down, completely out of control.
Credit and speculative bubbles are inherent in capitalism, and capitalism cannot exist without them. They are necessary for the functioning of capitalism. Even with them capitalism eventually gets into horrendous economic crises such as is happening at the present time.
If you want to get rid of all economic bubbles and the crises that come when they pop you must get rid of the capitalist system.
So The Onion’s article was truer than its writers realized! Unfortunately that more fundamental truth about the absolute necessity of bubbles under capitalism is not quite so hilarious.
(July 24, 2008)
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