Markets, Mobs and Social Mayhem

Reb highlighted the following article this morning and history would suggest that the potential for the type of fallout that  goes far beyond the financial and economic realms:

Waleed Aly, a lecturer in politics at Monash University writes:

The most lasting fallout of the global financial crisis is unlikely to be economic. This is the nature of true financial disaster: in the long run it brings down ideas, recasts societies and redistributes power in a way that resonates far beyond its lifespan. One day, the markets will stabilise and even recover, but the political terrain will likely be altered irrevocably.

Some ideological consequences are relatively obvious. Many commentators have already written obituaries for the creed of zealous deregulation that has prevailed throughout the Western world and especially in America. Indeed, that the Australian Government faces pressure to guarantee bank deposits establishes emphatically that people still want their governments to protect them, and are simply not soothed by promises of “market correction”.

In short, regulation and state intervention are likely to become more fashionable than at any time since the end of the Cold War. In political science terms, it seems we’re about to veer left. Witness a Republican president’s $US700 billion example.

But few are yet asking what this might mean for social politics. Perhaps this is because it seems a separate matter to questions of economic policy. Yet it is foolish to assume that each can be quarantined from the other.

Economics is important precisely because it has the power to topple social dominoes. And it is in the realm of social politics that some of the most frightening possibilities of the financial crisis suggest themselves

Should we be concerned?

37 Responses

  1. Actually, I’m more concerned about what Sharon Osbourne has to say about Nicole Kidman’s forehead..!

    http://au.news.yahoo.com/a/-/entertainment/5075340/osbourne-attacks-kidman-botox-use/

  2. On a more serious note, it does seem that in times such as these the old racism card reappears:

    http://au.news.yahoo.com/a/-/latest/5074443/people-want-migration-cut-study/

    Maybe “eyes” bishop will be come the “new Pauline Hanson”.

    She’s got the shoulder pads for it.

  3. Here’s a link to the complete article:

    http://www.smh.com.au/news/opinion/the-markets-will-stabilise-but-then-what-happens/2008/10/12/1223749846530.html?page=fullpage#contentSwap1

    I thought that was a little harsh too Reb. What’s the world coming to?

  4. Is that a light sabre in your pocket….?

  5. Hopefully it will create a more equitable society in the long term.

    Why do they think that socialist governments are being elected in south american countries. When capitalism, facism, communism or dictatorship becomes extreme it breeds a revolution. Whether this revolution is peacuful or violent depends on the circumstances and the leaders of the revolution.

    In democracies the middle class turn left. the problem is some of the more social governments then turn extreme themselves and become dictators as though they were right wing ideologues taking control of everything rather than only the necessities for the good of the people.

    It is the leaders that determine what the country will evolve into and this is why we need strong yet sympathetic leaders who do not let either left nor right ideology consume them to the detriment of the majority.

  6. In political science terms, it seems we’re about to veer left

    Not all is lost then! 😉

    Socially we may move to the right as a “balance”. Therein lies another set of problems, especially if you’re not a white heterosexual male. Some things never change I suppose.

  7. John… I tidied the post up a little, put in a break etc…

  8. Reb

    I’ve been waiting for someone to say something…I was going through my son’s photo/image gallery and thought it would give someone a laugh. I suppose you could interpret the light sabre as a phallic symbol…Get your grubby mind out of the gutter Reb! LOL

  9. Well John, you are reknowned for your long posts!

  10. Apologies, Joni, I’ll try to keep them shorter – I can’t promise absolutely though. Please feel free to put breaks in where necessary.

    I haven’t learned how to do that yet.

  11. I was referring to your sabre, actually… LOL

  12. Has Rudd gazumped Turnbull in economic management?

    Initially the unofficial story from the government was that it would guarantee bank deposits to $20,000, wholly inadequate and widely lambasted.

    Turnbull immediately jumped onto his populist bandwagon and demanded the guarantee be to $100,000, which economic reporters stated was still inadequate and unrealistic, but much better than $20,000 which was useless.

    Then stories started circulating the government would guarantee to $100,000 and maybe even $200,000, which had Malcolm jumping around telling all and sundry the guarantee was all his doing and the government should follow the opposition’s lead on economic management. This was followed up by July Bishop saying the opposition were obviously the superior economic managers and the government should be sitting down with them to flesh out economic policy and planning for the times ahead.

    Rudd then announced he will guarantee ALL bank deposits for the next three years no matter what the size, which was universally praised and Rudd gets tons of good media on his sound economic management strategies to date.

    Absolute silence from Turnbull and Bishop, and fact it appears they have gone to ground over the last few days.

  13. Now that was subtle! I bet you’re having a good chuckle at my response ‘I should have said ‘I’ll try to keep it short’ LOL

  14. “Absolute silence from Turnbull and Bishop, and fact it appears they have gone to ground over the last few days”

    Oh contrare Adrian! Talcum was on TV on Sunday night, desparately trying to claim that it was all his idea!

    LOL!!

  15. Nah – it’s OK…. I will be producing a primer on how to write posts, what to put where etc very soon.

    And just picking up on what the boyf wrote on polictial-duo , Noam Chomsky wrote this in an opinion piece published in the Irish Times :

    “The initial Bush proposals to deal with the crisis so reeked of totalitarianism that they were quickly modified. Under intense lobbyist pressure, they were reshaped as “a clear win for the largest institutions in the system . . . a way of dumping assets without having to fail or close”, as described by James Rickards, who negotiated the federal bailout for the hedge fund Long Term Capital Management in 1998, reminding us that we are treading familiar turf. The immediate origins of the current meltdown lie in the collapse of the housing bubble supervised by Federal Reserve chairman Alan Greenspan, which sustained the struggling economy through the Bush years by debt-based consumer spending along with borrowing from abroad. But the roots are deeper. In part they lie in the triumph of financial liberalisation in the past 30 years – that is, freeing the markets as much as possible from government regulation.”

  16. He’s a synopsis of my thinking. I know Stuntreb (in particular) reads every word!!

    Obviously the Australian economy is significantly dependent on the resources sector.
    The resources sector is largely driven by development of China. Indications are that the Chinese economy will slow, but not stop. China is a planned economy, it is difficult to imagine that the development tap can be turned off. Their population now has material and standard of living “aspirations”. There is still plenty of internal momentum for growth.

    The Australian economy will slow, but the government correctly suggests that our economy is stronger than many other developed economies, because to this relationship.

    I think this means –
    The decline in the domestic share price is largely due to a return of capital to USA, Europe, in response to their economic conditions, not ours. Manufacturing is likely to suffer more than mining & resources. Margin calls have probably peaked here. This should mean that the worst of the fall is over.

    The cost of housing in the expensive suburbs of Melbourne & Sydney should fall as should the price of holiday houses, as those that are highly geared liquidate their assets.

    I think we are in for a slightly bumpy ride, not economic chaos.

    Even more than requiring changes to social and economic policy, the international economic situation will cause the realignment of our foreign policy. We will have to make foreign policy choices between those societies we are more culturally aligned with, and those that will sustain our economic development. This is will be a huge dilemma.

    PS – Thanks for listening (if applicable).

  17. Tom,

    I always read your posts. We don’t always agree. But I agree pretty with much everything you’ve written there. Not sure about whether we will be compelled to deal with those societies where we have a “cultural alignment.”

    I wouldn’t for example, consider Australia to be culturally aligned with China but do consider them to be one of our most important, if not the most important trading partner now, and moving foward.

    And thanks for posting! It would be boring if we all held the same views, and by listening to others with differing views is how we all get to learn…

    On a more important note, what do you think of Nicole Kidman’s forehead?

  18. Tom,

    Just re-read your post and realised I have mis-interpreted the bit about the foreign policy dillemma.

    I suspect that we’ll just end up selling stuff to anyone that cares to buy it.

  19. I largely agree Tom, however, and your argument seems to be well thought out as well as sensible. However, the prospect of us suffering a long and deep recession shouldn’t be ignored.

    I’d like to point a few things out. Firstly, China’s demand is slowing to more reasonable levels and from what I can gather the various contracts (with premium prices attached) now held with China are due for renewal in the next 12-18 months and that will inevitably mean significant reduction in revenues given the commodities boom is all but over.

    Also, what I’m trying to say is that China are as much involved in this crisis than anyone and are exposed to substantial risks.

    In fact, the SMH reports today that:

    “For 60 years the US has shaped the global financial system and occasionally made threats to get what it wants. In August a new era began.

    Now China stands between the US and national bankruptcy. Like a creditor that has invested all its savings in a single stricken business, China cannot extricate itself without seriously harming itself.

    Its challenge is to extract the advantages it can while keeping the US national enterprise alive.

    The prospect of losing $US400 billion, perhaps even as much as $US600 billion in Freddie and Fannie was a severe shock to the Chinese political and financial system.

    A former senior adviser to the Chinese central bank puts it this way: “If these two companies went bankrupt, then all mortgage bonds will go down. So we will lose $US400 billion in one go.”

    The former adviser believes China has a long fight ahead of it to save its assets.

    “The bonds have been taken over by the Government so they are temporarily safe. Temporarily. China’s assets are still in danger at least of devaluation, even default, so China should join other countries on how to stabilise this situation.”

    The risk is that governments can miscalculate, they can misread each other and they can be pushed off course by domestic politics, even in an authoritarian country like China.

    The overriding comfort for the world is that it makes no sense for China to abandon its US government investments. Even a hint that it might do so would send investors rushing for the door, causing the US dollar to tumble, US long-term rates to shoot through the roof and the value of China’s foreign reserves to evaporate.”

    I also refer back to what I’ve written previously

    There are a number of challenging factors that will need to be addressed, in my opinion. It’s a combination of factors and how they play out that will determine how much damage is done and how much time will be needed to repair the damage. The prospect of major job losses also doesn’t auger well for many people carrying boatloads of debt.

    1. Personal debt and poor savings record: It’s claimed that Australians are the world’s worst when it comes to saving, an Investment and Financial Services Association report said.

    The IFSA report, released last year, showed that on average Australian households have $160 in debt for every $100 they earn.

    In fact, only recently it has been reported that bad debt and household interest servicing have reached historic records, even before the major banks raised their lending rates independently of the RBA.

    2. China’s inflation factor: Former US central-bank chairman Alan Greenspan has been emphasising that prices for Chinese exports have started to rise, which will contribute to a revival of global inflation. Ben Simpfendorfer, China strategist for the Royal Bank of Scotland, puts it succinctly: “Where China was a deflationary influence over the last 10 years, it will be an inflationary influence over the next 10 years.”

    3. Is our financial sector as solid as it claims to be?: Our banks assure us that we are in a stronger position than the US to cope with any fallout, I tend to be more skeptical. Our banks have surely been aided in earning record profits off the back of complex and risky debt arrangements with other lending institutions, businesses, and individuals in recent years? This has been a global issue, not just one relating to the US alone.

  20. Stuntreb, I’ve posted extensively (on Blogocracy) about our Cate (Blanchett). I consider Cate to be an icon of all that is good. She is blonde for example (though via a bottle I suspect). She is also articulate, particularly after she has memorised a script.

    The sooner our Nicole concentrates on the important things, such as remaining a blonde, the more credibility she will have! Right now, she can’t choose between redhead, blonde etc. I ask – our kids need a consistent message from role models, and our Nicole is not providing this. She needs to lift her game.

    I see the Cate V Nicole thing as a bit like Bathurst, some like Fords, others go for Holdens. But it is the huge level of intellectual stimulation that is important.

    Thanks for the reminder about the important things, sometimes we do get far too preoccupied with the minutiae of life.

  21. LOL I get all intense and you and Reb are chatting about Nicole and Cate . BASTARDS wink

  22. Tom,

    Luv our Cate. She’s not afraid to play the “gutter trash” roles, which according to John McPhilbin, is where you’re also likely to encounter me fosicking around.

    I think Nicole’s never been the same since “the Tom thing”. Y’know Scientology n’ all that.

    Her acting range has been reduced to the flexibility of her forehead – basically ice maiden or bust.

    I never really thought she was all that good at acting anyway.

  23. It’s important to keep everything in relative perspective John…!

  24. Mind you, she was perfectly cast in “The Stepford Wives”.

  25. Keeping nicole a blonde is a travesty, she is a redhead.

  26. Neither Cate nor Nicole for mine. Both a bit gaunt. I like mine in the mould of Salma Hayek, or Megan Gale if we’re talking Aussies.

  27. Really James, I don’t know why you would wish to distract this exchange, and try to turn it into a beauty contest.

    We’re talking about Nicole, the work she’s had done, and the fact that she simply does not measure up as a cultural icon because she has an inconsistent hair colour. In this world you cannot be too blonde! Our Cate understands this, but Nicole just doesn’t seem to understand.

    Shane, she may well be a redhead, but I don’t understand how this is relevant to the discussion. She is an actor and therefore a role model. And we only want blonde role models for our kids, don’t we? If we accept redhead role models, next thing we’ll have to accept ones with freckles. I ask, where will it end?

    The botox is simply wasted on Nicole. Imagine how much value she could have had by spending the money on peroxide!

    During these times of economic uncertainty, I’m putting all my money into peroxide futures, and fake tanning studios.

    And remember where you heard it first.

  28. LOL freckles. Maybe thats whats wrong with the world , too many peroxide heads and its affecting their brains.

    We need redheads, fiesty and no holes barred.

    Blonde, all I can think of is that joke. Put her in a room with 2 shovels and tell her to take her pick. 🙂

  29. A blonde walks into a pharmacy and asks the assistant for some
    rectum deodorant.

    The pharmacist, a little bemused, explains to the woman that,
    they don’t sell rectum deodorant and never have.

    Unfazed, the blonde assures the pharmacist that she has been
    buying the stuff from this store on a regular basis and would like
    some more.

    ‘I’m sorry,’ says the pharmacist, ‘We don’t have any.’

    ‘But, I always buy it here,’ says the blonde.

    ‘Do you have the container that it came in?’ asks the pharmacist.

    ‘Yes,’ said the blonde , ‘I’ll go home and get it.’

    She returns with the container and hands it to the pharmacist who
    looks at it and says to her, ‘This is just a normal stick of underarm
    deodorant.’

    Annoyed, the blonde snatches the container back and reads out
    loud from the container ….

    ‘TO APPLY, PUSH UP BOTTOM.

    My wife sent this to me and she is blonde from her head to her toes.

  30. BASTARDS! Why do I walk straight into these gags?

  31. That reminds me, I’m hungry
    http://au.youtube.com/watch?v=3QRy-PEgbls

  32. “In this world you cannot be too blonde!”

    I completely agree. It’s practically a pre-requisite to be employed at Virgin Blue for example, plus the additional requirement for it to be parted on the side, and held firmly in place by hairclips.

    It did marvels for Jason Donovan’s career too, and of course Kylie.

    Whereas, Danni for example. She insisted on being a brunette and look at her now. Everybody hates the bitch!

    There’s a even a beer called Blonde!

    It is shite though, but not that that seems to matter. It’s designed for boys who think like blondes (ie it won’t give you a beer gut, much…)

    Rod Stewart was (is?) a blonde and he was convinced that they had more fun.

    Julie Bishop’s a blonde too..and um…I seem to have lost the argument…

  33. scaper

    great one. 🙂

    John

    we all have to laugh and fat bastard made me laugh as well.

  34. Oh don’t get me started on Rangas. They’re winning Brownlow medals in Australian Rules all the time these days……it’s as if it’s ok to be a fanta pants.

  35. James,

    Better watch out …us Tangs will rule the world one day by impregnating the blondes to create a new master race…strawberries!

  36. I agree stuntreb, Virgin Blue certainly seems to have the correct formula for business success. Lots of blondes, and off shore all the annoying bits of an airline, such as heavy aircraft maintenance. If I was starting any business that’s what I’d do.

    I’ve always thought that Qantas had too many brunettes to be a serious airline.

    Danni has made a huge mistake by continuing with the brunette look. She could be loved by all. She has had all the surgical corrections that any self respecting woman could wish for. And even some that aren’t required for self respect!!

    But there we are, she willingly chooses to remain the subject of our scorn, the evil sister, the brunette. I say – GET A LIFE DANNI.

  37. Very funny all.
    Normally the quoting of (The Great) Noam Chomsky isn’t followed by such erudite analysis of our beloved plastic rolemodels.

    BTW, the ranga is still a scientology plant…operating thetan lvl 3.
    One day L.Ron Hubbard’s spaceship (that just happens to look like a 60’s jetliner) is gonna take Tom, the ranga & all of the beautiful people back to the volcano that they erupted from; leaving the rest of us lost & without their undeniable wisdom to model ourselves upon.
    It will serve ourselves right.

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