Monday, April 13, 2009

The Reckoning

Although I'm not quite ready to give up on what's left of civilization and hide out in a mountain cabin with a couple of SKS rifles and a few hundred pounds of lentils and beef jerky, it's still very difficult not to agree with the alarmists' possibly overwrought prognostications, rather than the too-rosy views of the triumphalists. Jim Cramer clearly has not learned anything from his week of public contrition and puling excuse-making for Jon Stewart's mighty wrath; already Cramer is publicly assuming that things have bottomed out sufficiently, are on their way back up, and is doing something called a "bull dance".

I guess I haven't really sat through the man's show to any meaningful extent, but has he always been that schticky? I mean, I get that he's trying to make an inherently dry subject more "entertaining", but seriously, what sort of person takes their financial cues from someone who straps on clown shoes in the morning? No wonder everyone's going broke. One should assume these periodic upward spasms of the Dow are either an indication that another half-million people are out of work, or another scheme has been dumped on the backs of future taxpayers, or that the short-selling is continuing apace, and the uptick will be offset by a corresponding drop in a few days.

It's not class warfare to assert the obvious -- that what benefits Wall Street the most these days is more likely than not intrinsically poisonous to the average American's well-being. The past six months -- and more importantly, the next six months and more -- have made and will continue to make that abundantly clear. Instead of a sound-effect and sound-bite wielding finance teevee clown, perhaps an actual serious economist can shed more light:

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.


The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

Profit is only profit if value or wealth is created in the process; otherwise, it is merely the creation and redistribution of debt. The average American's wages are about what they were thirty-five years ago, despite productivity gains, despite comprehensive changes in workplace management and process design, because the geniuses at the top decided that they could better manage the gains than we could, by shoveling it into a financial system whose primary feature -- again, rather than creating actual, physical wealth -- was to facilitate capital mobility.

Creating a billion cheap shirts in a Chinese sweatshop, or a million shitty grocery schooners in Detroit, is at least the generation of tangible products; credit default swaps and derivatives are merely assholes playing poker with everyone else's money, expecting to be handsomely rewarded in the process, while everyone else figures out how to get by on a little less every year. It has resulted in an unconscionable level of disparity, especially for an industrialized nation.

So as I've reiterated probably too many times already (but as long as we persist in absolving incompetent flunkies of their past crimes, and abetting them in future ones, it bears repeating), the likely scenario is not some cataclysmic Mad Max potboiler, it's something more like this:

America is devolving into a third-world nation. And if we do not immediately halt our elite's rapacious looting of the public treasury we will be left with trillions in debts, which can never be repaid, and widespread human misery which we will be helpless to ameliorate. Our anemic democracy will be replaced with a robust national police state. The elite will withdraw into heavily guarded gated communities where they will have access to security, goods and services that cannot be afforded by the rest of us. Tens of millions of people, brutally controlled, will live in perpetual poverty. This is the inevitable result of unchecked corporate capitalism. The stimulus and bailout plans are not about saving us. They are about saving them. We can resist, which means street protests, disruptions of the system and demonstrations, or become serfs.

And we'll go along with enhanced security measures to ameliorate our fears, as a substitute for real investment in local communities. Better security would make some sense as a complementary measure, but not as a replacement for fostering local solutions. The state continues to step over dollars to pick up dimes, as the saying goes, because there's no disincentive.

And it's becoming clearer by the day that all the happy talk about "change", regardless of Obama's possibly nobler intentions, will be just that. He's too constrained by the entities who put him there to enact any significant change. He's already overcommitted to rebooting a failed system, hoping to jumpstart the patient's heart. His main advantage is that his ideological, political, and (ahem) intellectual opponents are mostly borderline retarded, where his putative allies are merely craven cynics and buffoons.

The conservatard bellowing over whether Obama is a socialist/fascist/floor wax/ dessert topping is entertaining, no doubt, but one rule of thumb these dipshits might consider is this (at the risk of sounding like Yakov Smirnoff): in a socialist system the government controls the banks; here the banks are controlling the government. Obviously, they're too busy congratulating one another over their revolutionary teabagging prowess to get this simple and obvious idea. But maybe the rest of us -- you know, the actual majority, as this cadre of loudmouths consistently polls under 25%, and most of them are either doddering morons who can't die off too soon, or people who are too intellectually dishonest or simply too stupid to bother with -- can find ways to disengage from this system of what is essentially debt slavery.

This is where it starts and ends. The only reason Wells Fargo is looking at record profits is because it has figured out another way to fuck honest people, either by jacking their credit card rates (and if you have credit cards and have not yet been told that your interest rates are about to double, regardless of perfect payment history, don't worry, you will), or picking their pockets directly through this bailout scam. This is the biggest fucking heist in history, period, and we are abetting it through our avatars of change. And the network media are never going to talk about it, not in real terms; when they're not cheerleading their corporate owners and financial decision-makers, they're thumbing their collective dicks over vital issues such as what kind of dog the Obamas will get. This is the kind of thing people have to start working around, if they are going to see any real change.

Or not, if one uses cultural artifacts as a barometer of a nation's mentality. The two biggest movies in the first third of this year are Paul Blart: Mall Cop (and I like Kevin James, but jeezus) and the third Fast and Furious sequel. The most-read books are usually either sob-sister mopes bearing Oprah's imprimatur, or ridiculous self-help tracts. Did anyone really need to plunk down twenty bucks for The Secret to figure out that thought and action motivated by "positive" rather than "negative" emotions tends to produce more "positive" results (aside, of course, from the ancillary anodyne effects)? Does anyone really need diet advice beyond "eat less, exercise more"? Yet there are entire industries built around the lack of taste, intellect, motivation, and willpower. No wonder we keep getting rolled by these cheap grifters so thoroughly and so regularly.

1 comment:

Joe Blow said...

I don't know what my cc rate is. I always pay off the balance each month.