Nick Paumgarten’s Literature of Crisis
These are interesting times, as the Chinese would say, and all the more worrying for it. Last week I spoke to a man who has built a reputation as a long-term value investor in Hong Kong’s stock market. “The market’s crazy”, he said, “I’m going to Shanghai for a while”. You just can’t argue with that. But there are other ways of perceiving the situation, and we can’t all afford a cross-country jaunt for the clarity of distance. So I’ve turned not to the dry financial press, with its hyperbole and gloom, but to a writer who knows how to weave a story a little better than well. Sometimes the technique is almost important as the telling, especially in describing what would otherwise be unknowable, or at the very least arcane.
Nick Paumgarten seizes on the role of credit in the current travails, writing in last week’s New Yorker. His brief argument is not in the least difficult to follow – interbank lending has dried up and all else has followed. “Hoarding”, he writes poetically, “is panic’s quiet twin”. That might seem a little too rhetorical, but allusion can often trump analysis in drawing the bigger picture. First the banks panic, and then they – and everyone else – start to hoard. It follows that when someone mentions recession, no-one really wants to spend. Everyone’s thinking about whether they can keep their jobs, whether their savings will last if they don’t. So things get worse, and hoarding really does become panic’s quiet twin.