Essay by Michael Betancourt.
The collapse of the United States’ “Housing Bubble” in 2008 is the logical and inevitable result of the illusion of production without consumption; however, in spite of the financial collapse, and the bailouts of insolvent financial institutions and the on-going disinflation, credit and value collapse, the institutions receiving bailouts became stronger as a result of the bailout indicating a fundamental change to the relationship between the physical commodity-form and immaterial values identified with currency and financialization. Financial “bubbles” are an inevitable result of a systemic shift focused on the generation of value through the semiotic exchange and transfer of immaterial assets. In the case of the “Housing Bubble,” assets being traded were based on mortgages — debts generated without regard for the reality of underlying, physical assets and the labor needed to meet those debts. The failure to address the immanent source of the problem precipitating the crisis — the default on underlying mortgages — and instead focusing on the financial institutions (whether it is through “bailouts,” regulation, or investigation of “fraud”) is a demonstration of the shift that has occurred from a physically productive economy to one based on semiotic manipulation; this situation has not been addressed by conventional media or analysis, and requires a consideration of how other, systemic factors of immaterialization are determining the kinds of choices available to engage these crises when they arrive.
How the collapse of the “Housing Bubble” has been addressed internationally reveals and validates the transformation from productive labor to semiotic manipulation, and consequently, in the various government “bailouts” focusing on reifying the immateriality of markets against physical limits by suspending mark-to-market valuations of assets, an action thus enabling the generation/maintenance of the immaterial values created in the asset bubble. The continuing disjunction between physical assets and their role as immaterial tokens within a system of exchange are suggestive of larger, more systemic crises to come: the underlying problematic of debt generated as a side-effect of immaterial production (the transaction costs posed by the semiosis, subsequently doubled by bailouts that serve to regenerate or “reinflate” the initial asset bubbles through additional sequences of sale and resale sponsored by government agencies for the protection of the markets and those who profit from them) hypertrophies the underlying pathology by creating additional debts and, paradoxically, by increasing the value of assets whose uncertain values are the cause of the initial panic, evident in the collapse of the asset bubble itself.