Extract

Christian Kloeckner

Risk and Nostalgia: Fictions of the Financial Crisis

Abstract: Reading novels by Paul Auster and Dave Eggers in the context of competing definitions of risk and uncertainty, this essay aligns their nostalgic longing for an economy grounded in material production as part of a wider cultural response to the uncertainty brought on by processes of financialization and failures of financial markets. Creating time-spaces of potential resistance, this nostalgia also generates alternative futures.

Financialization, the Future, and Two Faces of Risk

Since the crash of the real estate market in the United States and the global financial crisis of 2007–2008, our discourses on the financial markets have often focused on the damaging outcomes of various risky financial behaviors.1 In the wake of the crisis, it became disastrously obvious that the deregulation of the financial markets since the late 1970s and skyrocketing performance-based bonuses for bankers had enabled and rewarded ever more risky financial products and practices. Both these factors contributed considerably to the crash of the system. In response, Congress’s “Dodd-Frank Wall Street Reform and Consumer Protection Act” of 2010, along with transnational banking regulation agreements such as Basel III, sought to contain the risk of future crises by improving the transparency of various markets and strengthening the regulatory oversight of those financial institutions deemed ‘too big to fail’ as well as by imposing increased levels of banks’ capital reserves and establishing new rules for executive pay.