Dont call it a comeback. Ive been here for years. Im rocking my peers. Puttin suckers in fear...
"Don't call it a comeback. I've been here for years. I'm rocking my peers. Puttin' suckers in fear..." oksanaphoto/

On September 21, the U.S. Attorney General William Barr declared Seattle an “anarchist jurisdiction.” Our city, along with Portland, Oregon, and New York, New York, had, according to Barr, become a zone where everything is permitted (“violence and destruction of property"). And what could Barr do to places that refused to "undertake reasonable measures to counteract criminal activities?" Cut federal aid.

Less than a month after Seattle obtained the distinction of being outside of the law, Construction Dive, a website that "provides news and analysis for construction industry executives" revealed that "Seattle right now has more tower cranes than San Francisco, Chicago, and Las Vegas.... combined." How will the mind of an executive or developer fit this fact with Seattle's "anarchist jurisdiction" status? Of course he or she will pay no mind to Barr's declaration and instead find a way to participate in a construction boom that seems to have survived the global pandemic.

But how do we make sense of Seattle's continued (even monstrous) growth?

The unemployment rate is still above 8%. Small businesses are closing left, right, and center, and a proper economic recovery is unlikely to happen until the year after next. But the cranes are flying. New buildings are going up and billions are being poured into an economy that appears to exclude artists, small business owners, and low-to-middle wage earners.

This disconnect between the city's construction boom and the ground economy corresponds with that which exists between the US's financial markets and its conventional economy.

Here is an article to consider. It is by the Harvard economist Kenneth Rogoff, who by training is orthodox—meaning he is of the neoclassical school—and who has devoted much of work to the defense markets and to leading the charge against a particular kind of government spending, fiscal.

In the Project Syndicate, a publication based in Prague that considers itself to be the "The World's Opinion Page," Rogoff provides three explanations for why the markets are booming in the middle of a massive recession. His first two explanations (animal spirits and low interest rates) can be dismissed as a waste of time. The only future that matters during a crisis is the one contained in cash. If that future is not in high demand, then confidence in other futures (animal spirits) and low interest rates can work their magic.

Rogoff's third explanation, however, hits the mark. It is quantitative easing (the government bond-buying and also its promise to buy bad paper) that's feeding fresh blood into what are effectively lifeless or worthless stocks, bonds, and securities.


A third explanation is that in addition to providing ultra-low interest rates, central banks have directly backed private bond markets—representing an unprecedented intervention in the case of the US Federal Reserve. These private bond purchases should not be thought of as monetary policy in a conventional sense. Rather, they resemble a quasi-fiscal policy, with the central bank acting as an agent for the Treasury in an emergency situation.

It's the availability of vast amounts of government cheese—not low interest rates, which are ineffective during a recession—that have, to use Rogoff's words, "tilted [tech firms] far into the future." The relationship between Bezos's billions and government-inflated stock markets is direct.

Also directly connected is the building boom and the future-abundant tech firms. With this connection, the cranes of Seattle can grow and swirl with complete indifference to the state of the city's conventional job market and worsening housing crisis.

The hard thing for many to see is that this situation does not signal an emergency. This is in fact how capitalist expansion has always worked. As the Polish economist Michal Kalecki explained over 80 years ago, expansion must become more expansion. This means Seattle is expanding because it has expanded. It's building more luxury condos because it has built more luxury condos. You cannot expand and reach satiation, or what John Stuart Mills called "stationary state." If that happens, the capital-saturated city, its whole economy (from top to bottom) will stagnate, which is nothing more than growth at a normal rate (1 percent and less). Or when r = g, or is even g > r.

The kind of society we live in does not have profits as its prime mover but rather exceptional profits. This is the actual state of capitalist equilibrium. It's not the moment, as neoclassical economics insists, when markets clear, when prices match with demand, when Say's law is satisfied. That would in fact would lead to a steady-state economy, which is experienced by the markets as disequilibrium, as a storm. When the seas are flat, market hell is empty and its devils are all here.