The S&P 500 has today breached new all-time highs, as the turmoil triggered by Brexit has been met with what are effectively promises of a new bailout effort by the global central banking establishment.
Shinzo Abe's landslide reelection as Japanese prime minister seems to put to rest any notion that Tokyo's stimulus policies have lost credibility, as the Japanese public has now decisively signaled that it would rather the economy fail on account of one more stimulus that gets botched down the line than on account of one less stimulus that crashes asset valuations right away.
That's pretty much been the story of the global economy since the 2008 meltdown.
And now this post-Brexit stabilization, should it be sustained, heralds a permanent shift to central planning and a death knell to the Western, especially the neoliberal, conception of "free markets" and, quite possibly by extension, "capitalism" itself. The freezing of liquidations in the UK's largest commercial property fund has put investors on notice that nowhere can they expect their money to be freely redeemable in the event of a liquidity scramble that threatens to turn into a stampede and thereby pull the floor from under risk assets.
To save Britain and Europe, its monetary authorities may be irrevocably "Sinicizing" its rigged and manipulated financial system. It may take a while, but the potential shift is profound: Western investors may eventually find Chinese markets more attractive as Beijing gradually opens its capital account, even as Chinese investors eventually realize that their assets in the West aren't as secure as once assumed, especially if electoral instability continues to expose commerce to the vicissitudes of politics.
This isn't necessarily bad news in the long run: it could be just the crisis that Western capitalism needs to save itself. Much like Chinese communism had no choice but to make groundbreaking concessions to deregulated markets to save itself from its own excesses, perhaps Western capitalism must likewise be purged of its self-imposed distortions and perversions to recover both vitality and credibility.
But that means acknowledging the sad state of current affairs: "free market capitalism" risks becoming little more than a fantasy of armchair "experts" out of touch with the real world. And these folks include many stalwart conservatives of the Reaganite/Thatcherite heritage who are effectively in denial of their own culpability in the failure of their ideas. For years, they could blame pesky progressives and filthy socialists; now they themselves are exposed as fundamentally corrupted, as well. That the system has been deliberately rigged for so long to primarily benefit the capitalist class doesn't make it more "free" or less "planned", when it really comes down to it, than a system rigged to purportedly benefit the common masses.
More to the point, just because the capitalist elites have so clearly betrayed their own principles with quasi-socialist practices doesn't mean that capitalism itself can be cleanly exempted by blaming all its woes on socialism. This lie is the main target of the populist rebellion on both sides of the Atlantic: as of 2016, no longer will the conservative base of Western countries be bamboozled by the propaganda of "capitalism" to in fact nurture a most insidious form of socialism.
No comments:
Post a Comment