Tuesday, March 10, 2009

Premediation, Economic Crisis, and the Post-9/11 Security Bubble

In "Conspicuous Consumption, A Casualty of Recession," an article on the front page of this morning's New York Times, Shaila Dewan chronicles the shift in economic mood among the American public, even among those people whose income has not been directly impacted by the current recession/depression:

"In just the seven months since the stock market began to plummet, the recession has aimed its death ray not just at the credit market, the Dow and Detroit, but at the very ethos of conspicuous consumption. Even those with a regular income are reassessing their spending habits, perhaps for the long term. They are shopping their closets, downscaling their vacations and holding off on trading in their cars. If the race to have the latest fashions and gadgets was like an endless, ever-faster video game, then someone has pushed the reset button."

Although many people are confident that this turn away from conspicuous consumption will end when the economy rebounds (these people are the same ones who are confident that the economy will magically return to its pre-2008 ways), others see this shift as more permanent: "To many, the adjustment feels less like a temporary, emergency response than a permanent recalibration, one they view in terms of ethics rather than expediency."

Whatever the global economic future may bring, the current recession/depression brings into sharp relief the relationship between the credit bubble and the nation's response to the catastrophic attacks of 9/11. The Times article takes note of the much-ridiculed advice of George W. Bush that Americans should respond to 9/11 by going shopping. The reason for this advice is that 9/11 produced both a security crisis and a economic one. In the weeks following 9/11 the stock market suffered tremendous losses, unprecedented until the current crisis. What now becomes clear is how this frantic shopping spree, which spread like wildfire from retail shopping at the mall to car leases and sales to domestic and commercial real estate--all of which was financed by credit that buyers could not afford--functioned as a collective affective response to the dual shocks of 9/11, an attempt to protect the US public from having to face the real possibility that such shocks (to our nation's security and to its economy) could happen again.

As I have been arguing since 2003, the attacks of 9/11 intensified a shift in the temporal logic of mediation in US and global media--particularly in the print, televisual, and networked news media but also in info-tainment media as well. Increasing almost exponentially in the run-up to the Iraq War, US and global news media began to focus less on reporting the actual news of the immediate past and more on pre-mediating the potential news of the near- and long-term future. This premediation manifested itself initially in the run-up to the Iraq War, where for more than a year before its commencement, the print, televisual, and networked news pre-mediated its execution in as many possible variations as news reporters, ex-military commentators, and government officials could imagine. The aim of this premediation, I have argued, was in large part to try to ensure that the US public would not be caught unaware as it had been on 9/11, would not have to suffer the same kind of collective media trauma that the attacks on 9/11 provoked. Premediation functioned as the media logic of the Bush doctrine of preemption, particularly insofar as the Bush administration used premediation of additional terrorist attacks to frighten the American public into accepting a regime of securitization that threatened many of the fundamental civil liberties on which the nation was founded.

What is now becoming clear is how the Bush credit bubble followed the same temporal logic of premediation, through the proliferation of positive, rather than negative, scenarios. As we now know, the credit frenzy of the post-9/11 years (including the lengthy bull market that eventually succeeded the post-9/11 crash) was sustainable only in the face of a future in which housing prices continued to rise, in which capital appreciation never ended. Where security officials stoked the public's fears by premediating the possibility of additional terrorist attacks on American soil, financial officials stoked the public's hopes by premediating the possibility of an endless appreciation of capital and real estate values, literally of the economic value of American soil. 

What may now also be coming clear is that, just as we had been living in a post-9/11 credit bubble, we have been living in a post-9/11 security bubble--fueled by preemption and fear rather than appreciation and hope. In other words, after 9/11 premediation in the US media took a double affective road, simultaneously fostering among the American public security fears and economic hopes. Both affective states were contagious, and both functioned to orient the US public to a rosier future in which the economic and security shocks of 9/11 would never happen again. 

We have now seen that such hopeful economic premediation could not succeed forever in maintaining the subprime credit bubble. It seems only inevitable that it will not be long until the post-9/11 security bubble suffers a similar fate.


Ken said...

post was good enough to make me get a new google password

Ian Smith said...

It is, though, worth considering that fundamental nature of US-political-economics has not changed, pre-mediation or not. There may be a backlash against financiers or even a permanent shift away from conspicuous consumption, but yet somebody saw the opportunity and managed to create the scam you yourself mentioned in the "mail us your gold" commercials.

Aside: This "business" is only marginally better than the financiers whom we have all bemoaned recently for creating vast paper wealth by exploiting miniscule differences in markets with huge leverage. These gold "merchants" do have to actually move small bits of metal around the world in envelopes, but they are basically exploiting a (large) difference in the market price of gold and the perceived (or acceptable) market price to consumers. Do you think Lehman Brothers would have made commercials for low-rent TV channels if they thought it would help them get an extra 0.01% of delta to exploit?

I unconvinced that pre-mediation, while agree it exists, does more than move the pieces around the board. A different set of charlatans are now in frame, to be sure, but does anybody really care *who* the charlatans are? I have seen remarkably few thoughtful pieces suggesting to the American people that indeed, their lives are going to change dramatically and so should (say) their moral compass or idealistic gas pedal. One sees far more discussion of "are we at the bottom" or "recovery" or "downturn" as if this were the middle stages of a NASCAR race with one's favorite driver losing ground.

The second world war generation - dubbed greatest by those with the glasses of rose - were given shock therapy that the world they knew was gone: A depression of epic proportions, hardships of every kind at home, and global conflict of indescribable violence and destruction abroad. It should not come as a surprise that they "got he message."

I strongly believe that Obama has the wherewithal and rhetorical ability to demand -not ask- that the American people become someone else because who they are sucks. I sadly, do not believe that those who public futures are less secure than his - everyone else in the Democratic party - would go along and Obama would be forever ridiculed as a hopeless dreamer. And he's slick enough to know it.