It is the REAL economy that needs the help…


I was moved to quote this passage from a novel I recently finished. The novel, written by Stieg Larsson, was set in Sweden and is about a journalist unafraid to investigate and expose a number of criminal corporations and the Swedish mainstream media lack of reporting the facts, instead aiding and abetting the corporations. Near the end of the book the corporations begin to be exposed and the corporation’s many investors cause the Swedish stock market to plummet. Our protagonist is being interviewed on TV and he was asked if he felt responsible for the economy’s freefall…

“The idea that Sweden’s economy is heading for a crash is nonsense,” Blomkvist said.

The host on TV4 looked perplexed. His reply did not follow the pattern she had expected and she was forced to improvise. Blomkvist got the question he was hoping for. “We’re experiencing the largest single drop in the history of the Swedish stock exchange – and you think that’s nonsense?”

“You have to distinguish between two things – The Swedish economy and the Swedish stock market. The Swedish economy is the sum of all the things goods and services that are produced in this country every day. There are telephones from Ericsson, cars from Volvo, chickens from Scan and shipments from Kiruna to Skovde. That’s the Swedish economy and it is as strong or weak as it was a week ago.” He paused for effect and took a sip of water.

“The stock exchange is something very different. There is no economy and no production of goods and services. There are only fantasies in which people from one hour to the next decide that this or that company is worth so many billions more or less. It doesn’t have a thing to do with reality or with the Swedish economy.”

“So you’re saying it doesn’t matter if the stock exchange drops like a rock?”

“No it doesn’t matter at all,” Blomkivst said in a voice so weary and resigned that he sounded like some sort of an oracle…

…Then he went on: “It only means that a bunch of heavy speculators are now moving their money from Swedish companies to German ones. So it is the financial gnomes that some tough reporter should identify and expose as traitors. They are the ones who are systematically and perhaps deliberately damaging the Swedish economy in order to satisfy the profit interests of their clients.”

As I read this in the book The Girl With the Dragon Tattoo, it struck me how descriptive this was for the situation we have now in the United States: Now, in 2008 – 09, in the US, we are bailing out the speculators with our tax money, even as they give themselves bonuses for causing the financial mess with our tax money. In addition, Americans have no mainstream media left to investigate the power of the corporations and speculators that clearly run our country and our very lives in the case of healthcare, among other things. Newspapers might be healthier if we had the good investigative journalism a democracy requires.

It is the Real Economy that needs the help, not the financial industry.

Americans need to understand the difference between the Real Economy and Wall Street. We have been conned. We were deceived by those politicians and economists who said what we had to do to fix the problem was to give money to Wall Street, then maybe worry about helping the Real Economy (manufacturing, infrastructure, health care and mortgage relief, etc.). What we did instead was fling a huge amount of money at Wall Street while ignoring the Real Economy, and on top of that, to throw that huge amount of money at Wall Street with no strings attached.

It was a lie. A lie to make sure as much taxpayer cash as possible was given to one of the largest segments of campaign contributors and then, that that cash would be unregulated and therefore could be used to subsidize executive pay, bank consolidation and financial industry profits. These are the so-called “free market”, “don’t regulate me” screamers, now saying keep the government out of our (real) economy. These are thieves led by dense economists. We have been swindled and our Real Economy is in bad shape.

Thanx to David Sirota for his column “We Were Punked” and of course, the late Stieg Larsson.

One Comment

I was struck by the same passage, Michael. It’s especially apposite given the meltdown in Dubai, which will affect some banks, but not goods and services except to the extent banks won’t extend credit to the producers of the goods.