"No One Could Have Seen it Coming": On the Next Crash

After financial crashes Establishment spokespersons are quick to make a cliché of the insistence that "No one could have seen it coming." This is, of course, a lie (not falsehood, lie), but one which elites much desire to have promulgated--to such a degree that Nassim Nicholas Taleb has made a career of trafficking in Donald Rumsfeld "unknown unknowns"-like rhetoric about "black swans" on its behalf. (Patriotism may be the last refuge of the scoundrel, but cheap epistemological nihilism must at least be competitive with it.)

It is not at all hard to see why. It is far more convenient for elites to say "No one could have seen it coming" than to tell the truth that "Yes, a lot of us were complete idiots, but a lot of us knew the risks, because this has happened again and again over the last three centuries and people far smarter than our so-called brilliant selves have worked out sophisticated theories about it that predicted pretty much what would happen very accurately, but the rich were still getting richer, and we didn't dare slam on the brakes because that's what really matters." Because that wouldn't go over so well with the public. Additionally, to say "No one could have seen it coming" conveniently delegitimizes those who did see it coming, spoke up, sounded the alarm. Thus does the commentary ceaselessly enjoin us to remember that economists predicted fifteen of the last six recessions or somesuch, and think of anyone who did "see it coming" as just the broken clock that's right twice a day rather than having had superior insight into the matter, or shown greater frankness about it, such that they are undeserving of attention.

Thus does the Establishment clear itself of responsibility, as it throws discredit on those who do not tow its line, permitting it to continue monopolizing the discourse, to the dismay and contempt of all those who actually care about the truth, and the public interest, and other such things despised by those who malign "ethical" politics as they insist on "civility" and deference to Establishment experts rather than holding the powerful to account and no one having any memory whatsoever.

Given that the AI bubble may be in a late phase it would not surprise me to hear all this disgusting garbage dutifully trotted out again, along with other clichés of such situations as the obfuscation of the cause of the crisis through heavy use of the word "we"; much pointing of the finger at working people's fecklessness; the direction of inordinate attention to a few particularly blatant criminals whom the confused could mistake for the authors of the crisis (a Ken Lay, a Bernie Madoff) as the real sources of the crisis in the creation of a neoliberal griftopia go unaddressed; insistences that the proper thing is to let the disaster run its course without government stepping in, except to rescue the businessmen who created the disaster because of the pragmatic necessity of that, as they tell everyone else "Personal responsibility" ("Welfare for corporations, not people!" would be the "free marketeer"'s slogan if they were at all honest); dismissal of the public's suffering with claims that it had been living it up irresponsibly and needing a chastening to remind it of "what really matters in life"; and the trajectory of economic life that generates such catastrophes working out for the best in long run, and the necessity of "faith" that it is so. (Remember that commercial they ran after the dot-com bubble where people looked at the camera and said "I have faith in the market?" I would not be surprised to see the like again.)

However, if this mendacity, cynicism and extreme stupidity are only to be expected of the elite we have, it is not quite so easy to foresee how it will go over with the public. Certainly going by Thomas Frank a far from irrelevant percentage bought into such nonsense back in 2007-2008, enabling the champions of high finance to wrest victory from the jaws of defeat, to indeed double down on their policies in that way that has been the legacy of Barack Obama and his successors in the Democratic Party, the Tea Party, the Freedom Caucus. Yet they also generated a great deal more discontent in doing so, not least because the world never really recovered from that shock, and while it is hard to say just how the public understands the situation, it may well be that some of it is getting more skeptical of the old pieties (if the horror of our centrists over the possibility is anything to go by). Meanwhile the notorious hucksterism of a Silicon Valley that, however little a media still celebrating it acknowledges it, or even seems to understand it, has in the public view gone from representing capitalism at its best to all the public despises about it, as seen in the disgust figures like Elon Musk and Larry Ellison arouse in it, and their fatuous promises (remember "full self-driving by 2015?"), are all very strongly associated with the current mess. The result is that it will not be so easy this time to shift the blame from high finance to working people the way they did when telling everyone that rather than bankers, brokers and deregulators the culprit behind the real estate-driven crash was "the poors buying houses they can't afford," with all that means for the aftermath of the bubble's bursting.