and uprooted millions � none of these facts could be perceived through the lenses of the ruling moral syntax as facts.

Like the rules of the game to the players, and �the great game� is the language of the ascendant players themselves, the rules of value are not an issue they can think of inside the game. They can only calculate what maximizes their places within its political offices and investment returns. The truth thus comes increasingly to be only an issue of when the cheque clears, and how much more of the globe is made subject to transnational money-sequencing. In this way, the English-speaking world acquiesces step by step in a pattern of fanatic absolutism not witnessed since the fascist interregnum.

John McMurtry

This article is adapted from the Preface of John McMurtry�s Value Wars: The Global Market Versus the Life Economy, now in press (London: Pluto Press, 2002).

1. These facts and those in the following two paragraphs are most comprehensively documented by Nafeez Mosaddeq Ahmed, Director of the Institute for Policy Research and Development, in his valuable 200-page study, The War On Freedom: Causes and Consequences of 9�11. Brighton, UK, 2002.

�from Economic Reform, April 2002

The Template of Official Thinking

Like a bad dream, the �recession� and its problems are now officially behind us. That is the impression left by a front-page Wall Street Journal article (4/03, �Lessons of Expansion are Helping Economy Beat Recession. New Flexibility in Inventory, Debt and the Work Force May Soften Booms, Busts�).

Remarkably, the reappearance of symptoms of the underlying disease is taken for recovery.

The writers themselves do have their fingers crossed, but their doubts do not appear in the headlines crafted by other hands. �A robust rebound would be all the more extraordinary considering the shocks the economy has sustained in the last two years: the bursting of one of the biggest speculative stock bubbles in US history, a spike in energy prices, the terrorist attacks of Sept. 11 and the collapses of giant Enron Corp., and Argentina, Latin America�s third-largest economy.�

But these are all secondary factors in the world�s great illness. The basic one is the unrelenting the drive towards exponential growth of stock market prices, no matter what the cost to society (a.k.a. �maximizing shareholder value�). It is like an alcoholics� clinic hailing as the sign of a cure the ability of the their patients to sparkle socially again after a few gulps of the �right stuff.�

�The US economy�s ability so far to absorb those traumas and apparently escape with only a mild recession suggested that a fundamental change could be under way. At the heart of the argument is a belief that the economy has become more flexible. Manufacturers are quicker to adjust their inventories and labor force to sales fluctuations. Financial markets are better able to parcel out risk. And policy makers were faster to cut interest rates and taxes in an effort to prevent recessions. This could mean that while the business cycle � the wave of alternating booms and busts � isn�t dead, it has become easier for business executives and economic officials to tame.�

And the writers quote Fed chairman Alan Greenspan telling Congress the previous week: �The recuperative powers of the US economy have been remarkable.� He attributed the performance to the economy�s �apparent increased flexibility and resiliency, especially in the financial markets and in companies� access to timelier data such as sales and inventories.�

On reading this, you have to pinch yourself to make sure that you are not dreaming. From the congressional hearings on Enron, Global Crossing, and myriad other stars of the boom, it would seem that the distinction between real sales of those companies and what was off-balance sheet inventory was kept hidden not only from the shareholders but from the institutions that peddled their overpriced securities.

Mr. Greenspan as usual balances between the two views: �there are still �ample reasons� to assume the recovery will be tepid. The forecast of Fed policymakers is for the economy to expand at just a 2.5%-to-3% rate over the course of the year, too slow to keep unemployment from rising.� The new flexibility so gleefully hailed would not apply to the growing number of unemployed. These must be seen as impaired consumers unable to contribute to recovery.

The Flexibility of Broken Reeds

The writers continue, �For a look at the economy�s new flexibility, consider the auto industry. Vehicle sales clocked a remarkably strong annual rate of 16.7 million units in February, defying expectations of a bigger drop after last fall�s record pace. A big reason has been the exceptionally generous manufacturers� incentives put in place after Sept. 11, including zero-percent financing on many models.

�In the old days, such offers might have been difficult since all three of Detroit�s major auto makers had their credit ratings slashed last year because of slumping profits. That would have impaired their access to the bond and commercial paper markets and thus their ability to finance low-cost loans to buyers.

�But the downgrades last year didn�t present a major constraint � in part because auto makers have increasingly turned to the growing market for asset-backed securities to finance sales. [Today] investors are more willing to buy the pools of consumer auto loans, which carry high credit ratings, than the debt of the automakers themselves. Last year, finance companies � including the finance arms of auto makers � securitized 32% of auto loans and leases in this way, compared with 15% in 1990, according to Federal Reserve data.�

The thing about securitized loans is that an appraisal of the individual debtor�s creditworthiness is skipped. And equally notable, the profit position of the manufacturer is also ignored. And yet unexpectedly it may force its way onto the screen. Manufacturers with low profit margins are likely to dump their leased cars on the market at the end of the lease. And that will affect the value of the collateral backing the securi�tized no-interest loans. Their value will also be affected negatively by any increase in market rates. And with growing unemployment, many of the purchasers are likely to default.

What we have then rather than increased flexibility is simple deferment. The basic ailment of our economy is that it gorges on