Things are more depressing than they once were, Gawker founder Nick Denton noted in a recent interview. Given the times that “once were” ended with Denton being potentially sued for tens of millions of dollars arising from Hulk Hogan’s libel suit, that’s quite a claim. All the more so, when you recall that the libel suit was funded by Peter Thiel, a purported libertarian, to get back at Gawker for outing his sexuality.
But, well, it checks out, as they say. Denton was speaking in an interview concerning the closure of Buzzfeed News, the service once touted as the future of news delivery and now wholly shuttered. It appears that while it was doing the interview, news broke that Vice News was reportedly filing for bankruptcy — US Chapter 11 bankruptcy, which allows it to keep trading and reorganise.
The site was worth close to US$6 billion a few years ago. Or was assessed as being of such worth. Which gives a clue as to what’s going on.
This and other such events aren’t really a media thing per se, though it’s clear that cheap “channels” such as Buzzfeed et al are suffering from the impact of TikTok as a free provider of novelty crapola. They haven’t become unprofitable, or untenable — they never were, and the only thing that kept them alive was the long decade of quantitative easing (QE), the roundabout money-printing scheme by which Western financial authorities kept the show on the road after the 2007-08 global financial crash.
The QE tap was switched off just before COVID hit the world, which necessitated it being switched on again for a while. Now it’s really over, and in response to the multiple-cause inflation the world is grappling with, interest rates are going up. The Buzzfeed and Vice busts were preceded by the failure of Silicon Valley Bank (SVB), which had been a conduit for much of the free money floating around being plugged into start-up venture capital.
But SVB was just the first bank collapse. In parallel with the media collapses, it has been joined by Signature Bank and First Republic. The collapse of the latter is the second-biggest bank failure in US history, which will cost the American taxpayer US$20 billion in loans that will never be fully clawed back, and only the fact that some insulation was created after the 2007-08 crash has made it a minor news story.
Towers of mortgage-backed bonds are not collapsing. But they would appear to be one of the few things that aren’t.
Thus, in news that was shocking — shocking to everyone — the 10-minute delivery service MilkRun shut down in July, with the usual stuff from CEO Dany Milham about being part of the MilkRun experience, the service having eventually become, I think, a one-hour delivery service and providing only anchovies and tea candles (sadly, I have this week shuttered my own delivery start-ups: Gocer, Wheels of Cheese, and “Dave ‘Stomach’ Growl’s Food Flyers”. Thank you all for being part of the Food Flyers experience).
Milham had the typical media hype, as though another designer black-T-shirted young man marshalling a tranche of capital for start-up B12, version 7, was penicillin, the sequel. But there seems to be a bit less of that hype now. Still, there are always solid outfits like Canva, which is, oh, not letting its employees cash their shares until the market improves. Even the most recent round of doughnut franchises — which is to QE money what purchasing failing pubs is to heavily concussed retired footballers — appears to be failing to thrive. Again, amazing. How many of these franchise brands have there been now? Eight, nine?
This slow running down of the QE economy is that first cold weather tingle informing you that you will soon be doubled over in pain from some inflammatory ailment. Victoria’s Premier Dan Andrews got the tingle yesterday morning with the RBA’s latest rate rise, squawking that the RBA had told the Victorian government to borrow money, it would be cheap forevah, etc.
Dapper Dan is a man of some pride. But he is nevertheless willing to whine in order to create an easy enemy. Thousands of Victorian homeowners are going to be hating on the RBA as they try to pay for their ludicrously overpriced houses. Soon the jobs spigot of the Metro Tunnel, the West Gate Tunnel — big concrete doughnut franchises that allow private contractors to bill the government eye-watering amounts — will finish. This time they will not be replaced.
Victoria will have to once again live off its actual industries, which are chiefly restaurants opened and maintained for money-laundering purposes. The only thing that will hold off political disaster for Andrews is that the Victorian Liberal Party is itself a failed start-up (thank you for being part of the Matt Guy experience. We are no longer trading. Our blog The Virtues of Selfishness will remain archive accessible).
So these are propitious times for Albanese’s Labor to hand down its first real budget, which will be an austerity one. The casual announcement that NDIS growth will be cut in half and the partial increase in benefits rates — which will exclude many single parents from any relief — are the small new item markers of a world of pain to come for hundreds of thousands of Australians.
Those thus afflicted will include the Albanese government if it does not make the crisis an opportunity to shift the tax burden to resource corporations, using the current political mood of the general public to do so. Yeah, right-wing governments leave a mess for Labor to sort out, but Labor has no one to blame but itself if it becomes a dutiful servant of capital enforcement.
Yet that is the mindset of the right, which dominates the party’s economic policy. And there is no one remaining in the parliamentary party with the moral force or clarity to make a coherent opposition to such, from the left. Or, more to the point, the will to do so.
Surrounding all that is the wider movements of state and capital in the West, as the global market economy, dominant for decades in the neoliberal era, and right up to the day before yesterday, is now conformed to the new era of global power blocs and great power contestation in a multipolar world.
As Paul Kelly notes in a pretty good essay yesterday, Joe Biden’s national security guru Jake Sullivan has really announced this as US policy, in a recent speech, from this day forward. For the US, the neoliberal v economic nationalist stance — a struggle that has sprawled across both major parties — is now over, at least as public policy. With the Biden administration committing to a post-globalised world, Bernie Sanders and new Democratic insurgent Robert Kennedy Jr all left economic nationalists, and Donald Trump and Ron DeSantis dominating the Republican Party, neoliberalism is being steadily displaced.
With that, there is now an attack of 20/20 hindsight about the decades-long demolition of national economic self-reliance, or even semi-reliance over past decades (Kelly doesn’t mention that the paper he writes for, when he was editor, was the main agent of the demolition job). Apparently, it was all inexplicable idiocy.
That itself is an idiocy, because it ignores the reason why the West was willing to accept an asymmetrical globalisation for several decades, allowing China and others to build their national base with protection, statism and capital controls. It was because Western powers needed a steady stream of cheap consumable crap to buy the consent of Western publics to a system that has been leaching away the purchasing power of wages as regards essentials — housing, education, healthcare — for decades.
The steady replacement of consumer goods manufacturing, then light, then heavy industry that gives us the $2 socks, $5 lamps and $100 flat screens, makes the savings that make possible the craft beer, espresso martinis, the food delivery, the $200 concert tickets and so on.
This has been the great reward, what we got instead of democratic socialism: a reduced working day and affordable housing and health. It has been just enough to keep us going, and to persuade people to first forgo, and then forget, that other things were possible. It is all that capitalism has left to offer, the great Pez dispenser of existential sugar hits.
Well, if we’re really going to wrap up the global economy and rebuild national economies, that is going to have to be sidelined for the effort to be real. This is particularly so in the hidden costs of business. The government is rabbiting on about quantum computing, but we have, for example, no significant homegrown 3D printing/additive manufacturing capacity of any scale, because it is five or six times cheaper to get parts made for that — and a host of other industries — in Shenzhen or other such mega-city factories. With the impossibility of driving wages below a certain point, there must be a crunch moment.
How will we persuade people that a lot of stuff can’t be afforded, services must further suffer, etc? Through military exigency and big fear. Hence the “coming war with China” and the commitment to a $500? $600? $700? billion submarine program, which Albanese has announced — currently in the UK for the coronation — as equivalent to the postwar development of the Holden. That is an obvious perversion of the Chifley government’s creation of a peacetime industrial base, from a wartime inheritance, and a signpost of where Labor is taking us.
The cheap money is gone. The cheap stuff will be getting more expensive. Housing, health and education will not improve. The resources sector will not be taxed properly to fund this. The left must surely be able to make some gains in this new period if its leadership has the courage and tenacity to uncouple class, economic and political issues from a compulsory set of social and cultural values dictated by a media elite, and a marginal set of desperadoes.
If not, the crap sandwich will be wrapped in a flag and delivered to our door for years to come. Depressing indeed.
