Letters to the Editor
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The Grand Opening Going Out of Business Sale
Now starts the cacophony of blame, panic, formerly undiscovered geniuses in the field of economics, political wizards, the Greek chorus created from digital technology, and a cleansing a la 1929 as the wealthy part with a few of their precious corpsuscles -- and not one hell of a lot happens in that damned Reality Based Community.
None of this is new. It's been looming for literally decades,and it hinges on a very simple (and simply-cured) malady: greed. Everyone who has not tried to be part of the solution has de facto been part of the problem. So what do we do now? Take them all out and shoot them? Most of us have taken some part, if only passively, in the current depressed state of everything, and no one was willing, from the least of us to the greatest, to forgo any material gain, any useless, foolish pleasure. The culture of giant motor vehicles, McMansions, vaulted ceilings and giant-screen TVs has only been the big neon sign over our storefront, announcing that "We've totally lost our mind!" and were selling anything we could sell, at an obscene profit disguised by its grossly inflated Suggested Retail Price.
We also sat idly by as our hired help (you know, the Death Dwarf who has been inhabiting the Whited House for the past seven years) took his cue from previous conservative administrations, one in particular, and decided to see just how far he could go toward proving the American people can be sold any bill of goods. We allowed it. We bought into it. We got scared.
And now, courtesey of Robert Reich and other people who frankly don't know precisely how economics works (many an economist has told me precisely that same thing), we are in the midst of working up another panic which should prove incredibly profitable to a few while the many will either lose or perceive they have lost a great deal of their substance. Some, who already have very little, will have a little less because "when you got nothin' you got nothin' to lose", but Americans are always ready, willing and able to panic and overvalue their "losses." They aren't willing to wait for things to quiet down, either.
There is no George Bailey to calm everyone down, so the old Savings and Loan will likely go under. Well, maybe CitiCorp will go under. And BOA. And Merril-Lynch (whatever happened to Pierce, Fenner, etc.? Where were those bodies dumped?).
It is not as though we just passed some sort of irreversible tipping point, but the media and the mob are working together to create an impression of universal catastrophe, and the worst that can come out of such a scenario is not that John McCain will be elected President (he won't) but that the people whose corpuscle we have sucked for decades and are just now realizing their flush of success has depended in great part on the strength of the Yanqi dollar are going to be pissed. And they have their ways of evening things up.
Consider it an "adjustment." That's what it is. It's all a matter of scale.
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The Sale of America
Reich: As a practical matter, our only real hope for avoiding a deep recession or worse depends on loans and investments from abroad -- some major U.S. financial firms have already gotten key cash infusions from foreign governments buying stakes in them.
Just come out and say it: America is now for sale.
It will start with financials like Citibank, Morgan Stanley, Merrill Lynch, and move all the way through the economic infrastructure of this country, probably finishing with one of our last real areas of innovation and global leadership: the drug companies (if they're still around after the trial lawyers and universal health care dictates get through with them.)
The debt owed by the U.S. across Asia and the Middle East is truly staggering, well into the trillions. What is the world to do with all the dollars we've sent them for plasma televisions, beautiful new cars and the oil to commute from a formerly overpriced home in the Inland Empire to Los Angeles? Is there not enough good Napa cabernet to make up the difference? Why wait for these dollars to fall further in value? I'd be buying up America too.
But it's not even foreign citizens buying us! No - it's government controlled sovereign wealth funds. That's right - these foreign citizens are smart enough to dump detested US dollars back on their governments and exchange them for real currency. This leaves the Abu Dhabi Investment Authority sitting on more than $1.5 million per person! That's some high end shopping to get done!
We have a U.S. government unwilling to admit that the $10T in debt doesn't even begin to account for all the false entitlement promises they made. Would politicians say something just to get elected? That's bad, but what's worse is an electorate so numb and miseducated that they have no chance to ever understand their predicament.
How about a Federal Reserve so keen on keeping up this charade that they are willing to risk collapse of the dollar while creating entirely new powers out of thin air? Although we should be facing a straightforward deflationary recession with the unwinding of all of this bad debt, we've got a government that acts like it's ready to become the next Zimbabwe. Yes - their stock market goes up too! Lending to banks is not pushing out enough money, so the Fed may be ready to broadly lend to IPC's as well. Let's guarantee the bad debt for Countrywide while we're at it! Money for everyone!
The end result of all of these policies is hyperinflation, and a collapse of the US dollar. What better way to get rid of the debt than to simply inflate our way out of it? Then no foreigners will be foreclosing and taking over our assets! We will no longer pass a mountain of debt on to impoverish and enslave our children for their lifetimes. We'll just print it and say: "It's Tuesday, and here's the money for that hamburger!"
If you were a politician, what would you do?