Žižek weighs in

at the London Review of Books

That the criticism of the bailout plan came from conservative Republicans as well as the left should make us think. What left and right share in this case is their contempt for big speculators and corporate managers who profit from risky decisions but are protected from failures by ‘golden parachutes’. In this respect, the Enron scandal of January 2002 can be interpreted as an ironic commentary on the notion of a risk society. Thousands of employees who lost their jobs and savings were certainly exposed to risk, and had little choice in the matter. However, the top managers, who knew about the risk and also had the opportunity to intervene in the situation, minimised their exposure by cashing in their stocks and options before the bankruptcy. So while it is true that we live in a society that demands risky choices, it is one in which the powerful do the choosing, while others do the risking.

it’s really well-written and well thought out, typically. worth your time to read it.

Pre-Post Update: PRof. Roubini’s economonitor sent me an alert today:

The US and advanced economies’ financial system is now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) that, like banks, borrow short and liquid, are highly leveraged and lend and invest long and illiquid and are thus at risk of a run on their short-term liabilities; and now a roll-off of the short term liabilities of the corporate sectors that may lead to widespread bankruptcies of solvent but illiquid financial and non-financial firms.

On the real economic side all the advanced economies representing 55% of global GDP (US, Eurozone, UK, other smaller European countries, Canada, Japan, Australia, New Zealand, Japan) entered a recession even before the massive financial shocks that started in the late summer made the liquidity and credit crunch even more virulent and will thus cause an even more severe recession than the one that started in the spring. So we have a severe recession, a severe financial crisis and a severe banking crisis in advanced economies.

There was no decoupling among advanced economies and there is no decoupling but rather recoupling of the emerging market economies with the severe crisis of the advanced economies. By the third quarter of this year global economic growth will be in negative territory signaling a global recession. The recoupling of emerging markets was initially limited to stock markets that fell even more than those of advanced economies as foreign investors pulled out of these markets; but then it spread to credit markets and money markets and currency markets bringing to the surface the vulnerabilities of many financial systems and corporate sectors that had experienced credit booms and that had borrowed short and in foreign currencies. Countries with large current account deficit and/or large fiscal deficits and with large short term foreign currency liabilities and borrowings have been the most fragile. But even the better performing ones – like the BRICs club of Brazil, Russia, India and China – are now at risk of a hard landing. Trade and financial and currency and confidence channels are now leading to a massive slowdown of growth in emerging markets with many of them now at risk not only of a recession but also of a severe financial crisis.

now if that’s not a rosy picture i dont know what is