California State University, Dominguez Hills
University of Wisconsin, Parkside
Created: October 9, 2008
Latest Update: May 10, 2011
E-Mail to Jeanne in L.A.
E-Mail to Susan at UWP.

Topic of the Week: "Figurative Abstraction"

• Introduction to Recovery
  

  Yesterday the world's financial leaders cooperated to lower the interest rate globally to counteract the financial meltdown in the economy. The markets did not respond immediately by luring investors back. Now it's a waiting game to see if lowering the interest rate and pouring money into the financial system by covering the losses on mortgage-backed transactions will stop the credit crunch. No one knows for sure. But there is lots of expertise out there with many different perspectives.

  In this issue, I'll try to offer some idea of the different approaches experts are arguing over. For example, William A. Fleckenstein argues that Greenspan's policy of lowering interest and making credit easier to obtain fueled the bubbles, and led ultimately to the meltdown.

  "According to MSN Money columnist William A. Fleckenstein, Greenspan's nearly 19-year career as Federal Reserve Chairman is even worse than anyone imagined. Labeled “Mr. Bubble” by the New York Times, Greenspan was nothing less than a serial bubble blower with a long history of bad decision-making. His famous “Greenspan Put” fueled the perception of a Goldilocks economy-but, as this explosive exposé reveals, the bear has finally caught up with Goldilocks.

  From Barnes and Noble's online overview of the book, consulted by jeanne on October 9, 2008.

  Lowering interest rates globally didn't work as quickly as some had hoped. Will it work with a little more time? A lot more time? Or only in conjunction with other measures? This offers a good lesson in the "arrogance of knowingness." This morning's editorial page in the NYTimes offers Robert B. Reich's "Saved by the Deficit," an explanation of how differently indebtedness plays in helping or hurting an economy. Every time we're so sure we "know," we discover that things may be lots more complicated than we thought.

  "Another difference is that in 1993, the nation was emerging from a recession. Although jobs were slow to return, factory orders were up and the economy was growing. This meant growing demand for private capital. Under these circumstances, the deficit Bill Clinton inherited threatened to overheat the economy. He had no choice but to trim it, a point that the Federal Reserve chairman, Alan Greenspan, was not reluctant to emphasize. Unless President Clinton cut the deficit and abandoned much of his agenda, interest rates would rise and the economic recovery would be anemic. "Next year, however, is likely to be quite different. All economic indicators are now pointing toward a deepening recession. Unemployment is already high, and the trend is not encouraging. Factory orders are down. Worried about their jobs and rising costs of fuel, food and health insurance, middle-class Americans are unable or unwilling to spend on much other than necessities. "Under these circumstances, deficit spending is not unwelcome. Indeed, as spender of last resort, the government will probably have to run deficits to keep the economy going anywhere near capacity, a lesson the nation learned when mobilization for World War II finally lifted us out of the Great Depression."

  From Robert B. Reich's "Saved by the Deficit, consulted by jeanne in print and online October 9, 2008.

  Reich's article calls into question the generalized advice of Credit Is Good for business, but Credit Is Bad for individuals. That's the trouble with simplistic rules. They are poor models for real life. The inflexibility of rules hampers minor corrections that might keep us from major glitches like an economic meltdown. Feedback needs to be open from all participants if systems theory is to correct as scientists expect it to. (Habermas has referred to Luchman's system theory approach as "a non-learning system." Maybe we should be talking about our monetary system as a non-learning system and exploring how do develop better feedback and how to translate that feedback into effective corrections.

  The New York Times is running a series on understanding what led to this financial meltdown: The Reckoning: Risk in Hindsight.

 

References:

Saved by the Deficit? By Robert B. Reich. New York Times, Opinion Section, October 9, 2008, at p. A 33. Consulted by jeanne in print and online, October 9, 2008.
• Greenspan's Bubbles: The Age of Ignorance at the Federal Reserve. By William A. Fleckenstein. Link is to Barnes and Noble online.

• Bernanke, Read This Book on Greenspan's Bubbles. Review by James Pressley, on Bloomberg.com, founded by Michael R. Bloomberg, Mayor of New York City, who is currently challenging term-limits on grounds that he is needed for another term because of his financial expertise. Pressley's review consulted by jeanne on October 9, 2008.

• The Wolf Man and "Knowingness" A Dear Habermas teaching essay on the arrogance of the "knowingness" Jonathan Lear describes in Open Minded.

Announcements:

• Suspension of Dear Habermas Issue Timing

  Because I'm having to read so much to understand the complexity of the current financial crisis, I'm not going to try to keep up with the regular issue pattern. I'll try to remember to let you know when I've added to this issue, though. Check the new on the site page. jeanne

Issues

• Up soon.

Visual Sociology

• Understanding How We're Part of It All

  • Using Different Media:

    

    Monday's Start

    There's lots to think about in the financial crisis we're living through. We're not going to "get it" in a day, or a week, or maybe even in a year. But slowly we will catch on, and we'll rise to the occasion of demanding that our representatives start doing a better job of what we've elected them for. That's our responsibility. Openness to learning, good faith in hearing others, integrity, and meeting our needs to build a stronger, more just, more stable nation and world is their responsibility.

    Along the way, as we're learning, before we have the words to clarify our thoughts, we DO have feelings. Anger, frustration, the sense that we're being had. All that. Susan and I use art in all its many forms to capture our feelings and validate them for us in the complex world of what's happening to us all.

    The postcards and bookmarks are one way to express our thinking and feeling and share them with others, in the interest of developing solid skills in governance discourse. Susan and I use yarn and fiber as another means of expressing and sharing substantive stuff like this. We also use games as an interactive medium for experiencing these concerns at a deeper level of understanding. It doesn't matter what you use as a medium. Use that which intrigues you. There is much to be said, as Dewey reminded us, for learning by doing. Awareness and understanding seep in as we "do" that which we enjoy doing and share that with others who matter to us.

    Here's how I dealt with the stress of the last few days in trying to understand and deal with the meltdown: Monday, I started knitting and crocheting an abstract of the flag. I changed from knitting to crocheting in the middle of a row. Turned the piece in a different direction. Started back at an unexpected place, instead of finishing the row. Changed colors, keeping the flag pattern only as a starting point. Changed yarns, thicknesses, textures. I worked on it for a while, then put it aside.

  • Tuesday and Wednesday's Progress:
    

  Online Resources For Governance Discourse
  

  • References to check the truth of facts on political statements, charges, rumors:

  • FactCheck.org The Annenberg site, connected to University of Pennsylvania
  • PolitiFact

  • Fact-checking Political Advertisements for the Upcoming Election:

    "The Need: Sadly, there is a historical gap in Bay Area news media's coverage of campaign advertising. During the 2004 elections, for example, GradeTheNews.org found that Bay Area TV news averaged 1minute 24 seconds nightly covering ballot initiatives, but ran 2 minutes 41 seconds of paid advertising for those initiatives.

    "Help Newsdesk.org and The Public Press fill that gap by supporting a weekly investigative report on Bay Area campaign advertisements, to run from Labor Day through Election Day. Our goal is to help Bay Area residents cut through the barrage of influence advertising, and make truly informed decisions at the voting booth -- from the candidates to the ballot initiatives and propositions."

    Consulted by jeanne on September 27, 2008.

  • Newspapers: Labeling here is based on an article by Ashley K. Vroman on the impossibility of labeling newspapers by ideology. I personally go along with the conclusion of the conservative Media Research Center's L. Brent Bozell III: "if the paper never met a conservative cause it didn't like, it's conservative, and if it never met a liberal cause it didn't like, it's liberal." But then, what about the Wall Street Journal whose news staff is considered liberal and its editorial staff considered conservative? jeanne

    Liberal Newspapers:

    New York Times - Los Angeles Times - The Washington Post
    The Boston Globe - The Chicago Tribune

    Conservative Newspapers:

    The Wall Street Journal - The Washington Times - The New York Post
    Manchester (N.H.) UnionLeader - The Oklahoman

    The Ideological Labeling of These Newspapers:

    "To test my hypothesis that people cannot classify newspapers as liberal or conservative, I began searching for any source attempting to classify newspapers ideologically. The sole article I came upon was "Rating the Top 10, Left and Right" from Insight magazine, written by Keith Russell. Insight rates what they deem to be the top five liberal newspapers and top five conservative newspapers in the country. A possible explanation of why I could only find one article in this search is because people, including scholars and academics and most popular magazines, do not try to measure how liberal or conservative newspapers are. Some may know that they cannot do it reliably and validly because different methods yield different results. Perhaps others do not formulate methods or measures lest they expose problems of reliability and validity. Unsupported assertions may be politically and tactically superior to dubious investigations."

    From "Slandering" the News: How Labelers Cleverly Undermine the Reliability and Validity of Newspapers," by Ashley K. Vroman, May 5, 1999. Consulted by jeanne, May 28, 2008.

  • Beyond Newspapers

    • The Institute for Public Accuracy The Institute for Public Accuracy seeks to broaden public discourse. With systematic outreach to media professionals, the Institute provides news releases that offer well-documented analysis of current events and underlying issues.

      Paul Loeb, columnist and author, recommended this site for us when we're trying to be sure we've covered multiple perspectives on each issue.

    • OpenSecrets.org "Our Mission: Inform, Empower & Advocate"

      • Inform citizens about how money in politics affects their lives
      • Empower voters and activists by providing unbiased information
      • Advocate for a transparent and responsive government

      David Brooks identified this site in His opinion column on July 1, 2008 in the New York Times. It is a good source of data on issues and the various perspectives on and funding of support for those issues. jeanne

    • I also suggest the use of Arts and Letters Daily the Chronicle of Higher Education Site for clarification on the issues as perceived by other academics. jeanne

    Current Online Sources Freely Accessbile Current list that is being updated and revised, but on which most links are still functioning. jeanne

  • Farlex Free Online Dictionary:

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