Legitimacy of the Risk

No pain, no gain. If you endure the pain, you deserve the gain. The legitimate distribution of the risk proportion is simple, clear, and logically positive despite the negative value of having to endure pain; and in modern, civil society, much of the pain is in the form of anxiety.

If, for example, investors buy long and sell short, like many hedge funds do, the risk (the anxiety) is supposedly low because the investment tool (the long-short fund) controls the distribution of the risk. The pain is shifted (offset) to anyone positioned to "take" the risk (anyone not positioned long and short). The anxiety (the value derived from the offset) is shifted to the future.

So, when big banks put their money into commodity futures rather than lending to expand the economy, the fix is in for short selling the net worth (the assets) of the middle and lower classes, subsequently acquired (covered) by the wealthy to be resold long. The short position then gains value long as it is being covered (i.e., the recovery), converging the long risk with the reward which is reflected in strong "earnings" and high equity values. Strong earnings and equity values make it appear that the economy is healthy when it is really in pain--no pain, no gain.

The long position is falsely valued and will manifest in a crisis proportion of accumulated risk value in which the pain demands legitimate distribution of the gain. At this point, the crisis is one of legitimacy represented as the empirical value (debt-to-equity) that has been politically assigned. Despite political settlement, the ontological value of the risk will persist--demanding legitimately proper assignment, shifting the anxiety back to its source (i.e., the value has become fully retributive because the risk of loss cannot be avoided, it is fully assumed in priority). Retribution (re-attribution of the value) is not to be avoided because it is categorically imperative (it is ontologically determined, and resisting the ontology is cause for high anxiety).

Big, consolidated, financial interests are in a state of high anxiety. For Wall Street, re-attribution is a disconfirmation of status and power. It represents a loss to Main Street that, according to the power elite, results in chaos--civil unrest, like we see in Greece, for example.

To resist what the power elite considers to be incivility, it is necessary to consolidate power even more to exact the austerity (the pain) we need to avert the impending crisis (i.e., by properly assigning the risk--the anxiety--to the non-elite by organized means). Consolidation, therefore, despite it being the cause of the problem, is categorically imperative, both liberals and conservatives contend, for maintaining civil society. So, in the U.S., for example, we see the political will for deregulation rather than deconsolidation, and what regulation there is should be only to advance consolidation and control uncivil, retributive behavior. (Keep in mind that regulated consolidation occurs by political settlement. That is, consolidation is politically organized with reliable, economic effects, making it appear that consolidation is an economic ontology when it is really a political de-ontology that assigns the risk to the non-elite through what appears to be pluralistic processes. So, analyses that use a pluralistic model will fail--crises will not be averted, but encouraged. All the risk will not be accounted for, but its attribution will be ontologically demanded.)

Demanding re-attribution of the risk value is a manifestation of high anxiety: Wall Street sees overwhelming demand (need) for higher, marginal tax rates; Main Street a demonstration of raw power (beyond what is considered good or evil) that literally means extreme economic distress.

Budget cutbacks on the heels of the Great Recession will cause a depressionary trend...the Greeks know it...we all know it! Doing the wrong thing is not categorically imperative, it's just stupid!