"Resolving" the Crisis

Popular media outlets report that the experts agree the recession is over.

Both the Federal Reserve and the Treasury refer to their role in facilitating the recovery and preventing the double dip as "resolving" the causal determinants of the crisis.

To ensure the recovery is "V" shaped, the Fed and Treasury are assuring investors that the gamma risk will be surely applied. The organizational model of "too big to fail" will be resolved (deconsolidated) to prevent a "W" shaped recovery.

Acknowledging that a deconsolidation must occur to prevent stagflating into the next crisis (the "W" shape of the regression) is a significant reversal of policy (gamma risk) sentiment. The reversal will regain the confidence lost in financial markets that precipitated a perilous liquidity crisis, but will it prevent the same organized consolidation of capital that caused it?

A deconsolidation is a necessary condition for ensuring a free-market plurality of the system in which the consumer has sufficient income to demand the market over the ability of producers to command it.

A system that ensures more demand or more command is where the organized practical model is actually macro "resolved."

In the 1990's when employment was high enough for many employees to have enough control in the marketplace to make demands, neo-conservatives were motivated to revenge the classical model and re-establish a command and control. The revanche was validated by judicial review and ironically declared public policy by popular consent in the 2000 election.

The Clinton administration's more progressive tax burden allowed for a more substantial distribution on the accumulation than conservatives cared for, but his administration also allowed for the consolidation of financial entities that led to the worst liquidity crisis since the Great Depression.

On a macro scale, the political-economy is organized neo-conservatively, and this "jobless recovery" indicates just exactly what is actually being "resolved."

Allowing financials to consolidate increased the gamma risk, and political economists that identified the risk were told by both parties they were fringe-radical ideologues that did not know what they were talking about. That neo-conservative critique persists despite the acknowledgment that "too big to fail" may need to be "resolved."

The ambivalence suggests a probability: enough deconsolidation to pluralize the system into more of a demand economy is highly improbable, and resolving the system to maintain the classical model (reducing demand through unemployment) by neo-conservative means (Keynesian economics) is being ensured in priority.

The up-tick in net worth as assets appreciate with the gaining confidence in the stability of markets is more than offset by gaining unemployment. It is a deliberate and measured "resolution." It is the empiric that spites the revanchist rhetoric.

We should fully acknowledge the empirical resolve that transforms ideology from the subordination of belief into the freedom to gain the truth in which to truly profit.