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American Respite

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The recent crisis in the financial world has created a quick, knee-jerk panic response. While there's nothing particularly surprising about this, there is something surprising about the extreme nature of that response. Rather than a gloomy attitude expressed in mass-huddling under an economic umbrella, the response has become ideological, self-delusional, and, simply put, ridiculous.

Putting aside the calls of corrupt populist politicians like Silvio Berlusconi to "shut down" world markets, or even empty partisan diatribes of political hacks and financial quacks, a dangerous, almost hysterical tone can be head from some very unlikely people.

A friend of mine who, not so long ago, was a top executive at the European branch of one of the largest holding companies in the world has been exchanging emails with me about the crisis. Actually, I write him emails about what's going on in my life, about future travel plans, about anything but the crisis, and my former-exec friend responds with well laid remarks about the "neocon disaster," the "Republican blunder," the "Bush incompetence" that, by way of the financial trouble, has now made the world a "very cruel place."

This was all fairly unspectacular -- until I received the most recent email. In that email, my friend wrote how the latest trouble with the markets has "proved Marx right." Marx? Did I read that correctly? I went back, after rubbing my eyes, and saw that, indeed, my former corporate executive buddy, who now spends his days drinking fine things and eating fine things on a very fine European yacht, was intoning how Marx may have been wrong about communism but he was sure right about capitalism. He spoke about the German thinker's analysis of capitalism, his prediction of its eventual suicide, and even quoted Marx's old saw about giving capitalists enough rope to hang themselves.

I don't think my friend has read Das Kapital -- and neither have I. In fact, I confess here and now that, technically speaking, I know very little about what Marx actually wrote about the structures of capitalism. What I do know are two simple things. The first is that there currently is no recession. There might be a recession -- tomorrow, next week, next year, or whenever. In fact, unless predominant economic theory on the topic is utterly wrong, there will be a recession. This leads to the second thing I know: America recovers from recessions.

In fact, it's hard to understand how my executive friend could overlook this point. Economies go through a self-weeding process every so many years, getting rid of weak firms, trimming the fat on the new cycle of innovation, and preparing for new rounds of growth. Forgetting the theoretical, a simple look at previous recessions -- even ones severe enough to have moribund metaphors like "depression" attached to them -- do not send economies careening into some capitalism-socialism transition period, and they don't ruin entire political-economic systems either.

Rather -- and this might be the most important thing my friend failed to see as he was bowing down to Marx -- recessions strengthen economies built on solid, politically and economically sound foundations, and weaken ones that aren't. The case in point is the price of oil, which has done something that almost no analyst predicted a few months ago: dropped. OPEC is convening emergency meetings as sheiks, emirs, mullahs, and "presidents" gather to engage in their own orgy of panic.

However, these petrodollar countries actually have something to panic about. Without their steady stream of oil money to keep will-o'-the-wisp economies from sinking into the bog, they are in serious trouble. Every global misift (I mean, "non-aligned" country) from Saudi Arabia, to Iran, to Russia will suffer. The sinister-side-of-the-globe's banking center -- the UAE -- is feeling shudders run up and down its multiple tallest-in-the-world towers. Venezuela, recently teamed up with Russia, will have further domestic difficulties as oil-sponsored services start to dry up. And the Reds -- I mean the Ruskis -- I mean the Russians will start having trouble paying for their brash, almost intimidating, worldwide naval deployments (... to Venezuela).

Iran will have less money to spare for Hezbollah and will feel more pain from economic sanctions from the west, though it's unlikely that this will create any serious course corrections on its part. (Though the mullahs might rest easier now that the obscene amount of oil their shoddy infrastructure leaks into the ground is far less valuable than it was a month ago.)

And, of course, China -- with its dependence not on revenue from oil sales to the US but on revenue from the sale of everything but oil to the US -- will be similarly impacted.

For the US, a possible severe recession might mean some belt-tightening times, some gloomy days, a lighter Christmas shopping list. It won't mean severe budget reductions, decreased military spending, or a national food shortage. It will mean an economic trough, but an economic trough means an economic swell -- it just takes some time.

My former corporate executive friend was right that the crisis threatens to push some to the edge of disaster. While America might be close enough to see the edge and peer over it, it's not standing with toes dangling over the abyss. But many of America's enemies now are standing on that political-economic edge. In fact, many of the most dangerous among them are charging forward towards that edge, simply because charging forward is all they know how to do.

All in all, while the crisis is no cause for celebration, it's similarly no reason to set a fire just so we can have a fire sale. But more than this, while the crisis will definitely not be a game-changer for America, it certainly might prove to be one for America's most dangerous enemies -- whether Marx said so or not.

Ashley Rindsberg is a writer and freelance book editor who has contributed to a number of recent books and to online newspapers and magazines such as Livestrong, Ynet, and Israel Insider. Mr. Rindsberg has also worked at Internet Archive where he headed up the now internationally-deployed Internet Bookmobile project which brings books to kids in rural areas of India, Egypt, and other developing nations.