The year zero of Western depression

November 26, 2016 0 By Michel Santi

Up to the present moment, peace, democratic values and even happiness have been intimately linked to economic growth. It is thus public notoriety that economic depression is the royal path that leads to war, or to extreme and extremist situations and stances in any case. Negative interest rates now seem to be one of the manifestations of this extreme state that is shaking the Earth since nothing makes sense anymore when the creditor has to pay the debtor in order to lend to them! This goes beyond the obviously counterproductive facet of such an aberration, when an economy and its various players cannot function in such a situation, and comes regardless of the bond yields that are now negative since certain States must at present be paid in order to invest in them. These negative interest rates are synonymous with a world where capital – which has become vital for its holders – must be cooped up in complete security in these States’ treasuries rather than being invested in the real economy where it would benefit the masses. But above all, the true meaning of these negative interest rates and deflation which results from it is the implicit demonstration of the utter sterility of our society that is now obsessed with the preservation of assets.

This, therefore, is not a crisis. The torments that we suffer in fact signal the advent of a new paradigm, and spell the end of our Western civilisation’s mad dash for progress. The end of this mad dash that once deceived us after “The Glorious Thirty”, of this racing car low on fuel but which, tearing along at full throttle, isn’t stopping its insane race any time soon. Austerity itself must be interpreted through the prism according to which the main actors and deciders are convinced that the system can go on forever, and that the racing car is in a position to continue to tear along with no fuel, as if moved by the powers of the Holy Ghost, as long as it undergoes a good purge. The psychoanalysis of austerity reveals that, in their infinite naivety, the masters of the world are deeply convinced that economic, accounting and budgetary stringency and deprivations, are capable of saving us from decay. However, by imposing this suffering on their citizens, politicians have shown irresponsibility and culpable carelessness: exactly like a doctor who, through therapeutic stubbornness, prolongs the suffering of the dying patient.

While the illusion of life was able to be maintained through the medium of debilitating real estate appreciation, which had once maintained the middle classes’ material comfort, this extra effort to tranquilise the people was in reality to deal the system its final blow, with the help of the triggering of the subprime crisis. Additionally, this economic downgrading fooled the central banks who nevertheless threw themselves head first into their massive cash injections. In reality, this relentlessness only served to delay the inevitable, by insidiously disseminating the gradual deterioration of values. In fact, the central banks, their money press and negative rates have been fighting an already lost battle since economic decline comes last, after moral and civilisational decline that it had nevertheless been vital to diagnose… In this regard, are regression – and indeed drama – not clearly preferable to stagnation that is a sort of Rorschach test that everyone interprets according to their commodities? Because all the revolutions promised and even those that have been led have so far resulted in more of the same – in short, to a revolution in the etymological
sense of the word.

It is by this yardstick that the European authorities’ categorical refusal to let Greece go bankrupt must be understood. Beyond the aspect of moral hazard that consists of protecting the creditors of frivolous and lying debtors, and beyond the worry over the fate of the European banks that are heavily involved in Greece, there has in fact been a subliminal – Freudian – reason which was that such a bankruptcy would signal the end of our system and would attest to the failure of a model that belongs to a failed paradigm. In this respect, the introduction of a new European currency, in the absence of all solidarity and mutualisation on the one hand and in the presence of a central bank on German orders – Germans who are the emperors of deflation – on the other, was the last act of the reign of Europe’s stagnation. It’s as if the German economic diktat had tranquilised the continent, and drained its last energy stores. It is therefore by the introduction of this euro that it is possible to put a date on the death certificate of the West’s capitalist system that is now stifled by stagnation.

These shocking inequalities that we see, the 1% that has now become the 0.1% and who monopolise all resources reek of the end of Empire, just like the Pharaohs, the Western Roman Empire, Byzantium, which were all plagued by this opposition to change that is particular to a tiny minority obsessed by the preservation of its assets. Once a driver of innovation and the dynamo of our economy, this elite hasn’t even detected this degradation that infects it, and that contaminates even young and youthful nations and emerging countries alike, who are moping about in their stagnation they inherited from the failed Western model. Oil itself – that we one day thought would destroy the planet – is in turn being destroyed by our endemic deflation that is sterilising everything in its wake! The time has therefore come for clarity, perspicacious diagnosis, and radical measures.