Going Apocalyptic
by zunguzungu
Brad DeLong resorts to the apocalypse:
Q: What is the Geithner Plan?
A: The Geithner Plan is a trillion-dollar operation by which the U.S. acts as the world’s largest hedge fund investor, committing its money to funds to buy up risky and distressed but probably fundamentally undervalued assets and, as patient capital, holding them either until maturity or until markets recover so that risk discounts are normal and it can sell them off–in either case at an immense profit.
Q: What if markets never recover, the assets are not fundamentally undervalued, and even when held to maturity the government doesn’t make back its money?
A: Then we have worse things to worry about than government losses on TARP-program money–for we are then in a world in which the only things that have value are bottled water, sewing needles, and ammunition.
Don’t get me wrong. He may be completely right about everything he says; my critique is with his rhetoric, not his economics. Something shifty happens when you grant, right from the start, that a very likely thing is not worth thinking about because if it is, the world is over. The world is never over! The “deckchairs on the Titanic” metaphor is a nice way to belittle people who prefer to rearrange deckchairs rather than address the iceberg, but the world is not a ship, ontologically defined by whether it is sinking or floating; the world is a place in which history has a way of going forward, even if those living in it have difficulty imagining how.
This was my critique of some of David Simon’s more pessimistic moments; he, too, talked about “going down with the ship,” and he can if he wants to, but if journalism is dying, I predict that it will be replaced by something else and declare that that something else will be profoundly important. Life always goes on, somehow, and maybe badly, but the character and dynamism of its continuity is of profound importance for those of us who want to live in the future.
By the same token, no fair bracketing off the “toxic assets” assesment: everything I’ve read suggests that the majority of these assets are not undervalued, that they really are basically worthless, and that we do live in a world economic system that’s just lost all four engines. But the difference between a controlled crash-landing, where most of the passengers have a good chance of survival, and pretending that the engines still work (because the alternative is too dire to imagine) is extremely important, and needs to part of this discussion. To ignore it would be stupid, almost suicidal. Or rather, it’s a kind of thinking that those members of our society equipped with parachutes are more likely to indulge in, isn’t it? They can afford the fallacy. They’re not the ones flying coach.
Update: Krugman and Atrios, both readers of this blog, chime in their agreement.
zunguzungu 
I can’t find any reference by Simon to going down with any ship, save for a quote in Newsweek and in that instance, he’s talking about making the TV show that he and the actors and crew are proud of and “going down with the ship” together in that sense. It was a response to a question about whether he cared about the Emmy Awards.
All of the quotes I find from Simon argue for commitment, even if the odds are overwhelming against success. That may be pessimistic, but it is hardly fatalistic.
I think you’ve misquoted and your critique is one of a straw man that you are creating. Unless you have a going down to the ship reference that speaks more to world events than to making a show that Hollywood will recognize.
To tell the truth, I’ve backed away a little from my earliest, most straw-man like criticism of Simon; in the paper I delivered, in fact, I actually used the words “straw man” to characterize the difference between the most one-sided pessimist version of himself that he occasionally performs, and the much more thoughtful and nuanced thinker he is at other times. Like anyone else, Simon goes both ways.
That said, I took the “going down with the ship” line from the talk he gave at UC Berkeley, and were it not the last refuge of a scoundrel, I would proclaim “It’s in my notes, Gus! It’s all there in my notes!”
It’s late and my ADHD med stopped doing anything for me about three hours ago. Unless I missed something, isn’t saying that we’re falling out of the sky in a big chunk of metal similar to saying, “apocalypse,” even though the scale is smaller?
Otherwise, I do like your analysis of rhetoric. There aren’t many who do that without a huge political/theological (theosopolitical?) agenda in mind. Or, did I miss that, too? Honey, where’s my adderall?
Cheers! And yes, theosopolitical agendas are things that only other people have; I, myself, am without blemish of ideological prejudice.
I would say there’s a big difference between being in a plane without engines but a pilot who knows how to crash land a flightless bird (in the Hudson, say) and a plane whose engines are shot but a pilot that keeps trying to restart them, and who (as a result) refuses to adapt to changed circumstances. That the plane is fucked is constant; the question, instead, is whether we have a pilot who’s willing to face the facts and try to bring her down as soft as possible under those circumstances. I worry that Geithner is not that guy; I see him fingering his rip-cord.
Alright. A nice distinction. Thanks! I’ll try to check in often. Where do you find the time. Is this a byproduct of something you already do as a paying gig?