Sunday, October 26, 2008

Crash and Burn
(or, the ruinous end of the Empire of Dunces)

Though it is to be expected, the pandering For Profit Media is leaving the American people a thoroughly uninformed and, even worse, a hoodwinked one. This will lead to horrendous results with the present and upcoming Crash of the American Empire.

Even now, as the end of the reign of the American Empire swiftly encroaches, most Americans remain cocooned in their comforting blankets of ignorance. This is easily seen in the espoused world views of such as “Joe the Plumber” as well as the vile howls issued by various attendees of many McCain/Palin rallies. Their videotaped inanities show various degrees of: misinformation, brainwashing, illogic, ignorance, hatred and simple stupidity raised to the nth degree. Though the amateur reporters/videographers sometimes attempt to correct the misinformation espoused by the shrieking Know Nothings, rather than reflect for even one moment on such information, these obviously hateful knuckle draggers simply spew more bile and vitriol.

How does this all connect to the topic of the crash and burn of the American Empire? Most of what these benighted dunces spew are outworn paeans to American “exceptionalism” and reflect their completely distorted view of America's present condition and position in the world. These dunces still see America as the undisputed “leader of the world”, a “beacon unto the world”, an “example to the world”. It is past high time that we, as Americans, come to grips with the fact that we are not now, if we may well have been, any of these.

Since 1971, when Nixon scuttled the Bretton Woods System (which had been specifically crafted to give the U.S. unquestioned financial dominance in the post W.W. II world), by severing the dollar's convertibility to gold, Nixon essentially simultaneously opened the door to turning the dollar into the world's “reserve” currency while turning the dollar itself into a fiat currency. As long as the underlying economy of the U.S. was sound, this was a quite advantageous situation for the country. As long as the U.S.'s real economy was relatively sound, this was a wonderful idea; the dollar's status as reserve currency created a huge demand for dollars essentially acted as a massive subsidy and support for the U.S. economy.

However, over at least the last 30 years, “conservatives” and Republicans (far too often with major support of many “Democrats”) have been busily at work, hacking away at the very essence of America's “real” economy. As they steered America further and further away from a “real” economy and toward a financialized economy, through a wide variety of Randian, “free market” manipulations, more and more of America's real economy, actual manufacturing, has been increasingly offshored to low cost labor markets. What this has meant is that America's productive economy has been hollowed out, those higher paid jobs going offshore, replaced by much lower paying service jobs. In tandem with those losses we have had a shift into “financial” jobs, i.e., non-productive speculation.

With the rise of the financial sector the “Whiz Kids” on Wall Street have created a myriad of “financial innovations”, such as the now evident vaporware such as CDOs, SIVs, etc. In addition to creating these vehicles of their now revealed Ponzi scheme, the Wall Street sharpies went around the world, selling what they knew to be worthless scraps of paper as “solid” investment vehicles. As the underlying bad loans started to sour, the Ponzi scheme was exposed and the entire financial deck of cards began to crumble.

With exposure of the underhanded double dealing of the fat cats and speculators on Wall Street, the U.S. has lost what vestiges of legitimacy it had. The U.S. now stands naked before the world, the world's biggest debtor nation, it's financial markets shown to be all flash and no cash. The situation has become so bad that there is serious talk in international financial markets of abandoning the dollar as the reserve currency and turning the yuan into the new reserve currency. Before you scoff at the idea, it would be good to remember that China now has the largest reserves followed by Japan. Again, it is good to remember that the U.S. is now the world's largest debtor nation. To put it bluntly, we are bankrupt and China and Japan are our biggest creditors.

There is a very good reason why snake oil and patent medicine peddlers were “traveling” operations; you had to peddle your nostrums quickly and be off...before the local yokels either became sickened from the garbage you peddled them or found out that the “medicine” was worthless! Wall Street and the U.S. have peddled their sickness inducing products and now that the world economy has fallen deathly ill from this financial toxic waste, they are looking accusingly at the peddler and are quite irate. The pitchforks and torches are out and the tar and feathers are being brought to the fore.

It will be a quick, inglorious and disastrous fall!

Sunday, October 12, 2008

On the economy...

No, I'm not an economist...and I don't even play one on TV, however, I have had a few economics courses and I still maintain an ability to reason and face facts and reality head-on. Hence, the following observations.

1. Though it would be pleasing to do so, one simply cannot lay ALL of the blame on Bush the Lesser's (mal)administration. Granted and agreed, this (mal)administration has removed what few restraints and regulations were still in place holding back the tidal wave that has crashed about us in the last few days. However, even when the current (mal)administration took office, most of the restrictions and regulations that were developed and implemented following the last economic cataclysm (oddly enough, arising from many analogous causes as the current disaster) had been dissolved.

2. Although the causes for the current financial and economic tsunami can be almost directly traced to the Reagan/Bush I (mal)administrations, Bubba Clinton and his (mal)administration are hardly blameless. Though often painted by the right wing as “liberals” and looked back at today by many “liberals” and Democrats as a “Golden Era”, Clinton was, in no wise, a liberal. Clinton (and Al Gore) were there at the founding of the DLC (Democratic Leadership Council) which served as one of those fabled devices of “triangulation”. What “triangulation” meant, in essence, was to push the Democratic Party away from its traditional base (workers, small business, minorities of all stripes, etc.) and toward more of the traditional Republican base (F.I.R.E.1 Sector, Wall St., etc.). The DLC reasoned (erroneously it would seem) that the traditional Democratic base had nowhere to go so they could be ignored while the traditional Republican base could be wooed and won by adopting more (big) “business friendly” policies. Additionally, Clinton surrounded himself with such Wall St. fixtures as Robert Rubin (Goldman Sachs chairman) and Lawrence Summers (Goldman Sachs chairman). As has proven to be the case with the current Secretary of Treasury, Hank Paulson (yet another Goldman Sachs alum), though they may accede to offices of public trust, they never forget from whence they came and hold the interests of the Wall St. entities close to heart.

3. The unseemly, unbecoming and inappropriate spectacle of the “Millionaires Club” aka the U.S. Senate crafting and voting on a Wall St., “bailout” bill (inappropriate inasmuch as ALL revenue bills are supposed to originate in the House) was truly nauseating. Nauseating because by far the vast majority of communications from their constituents was solidly against any bailout of the Wall St. fat cats that had made millions of dollars by essentially engineering the very situation they needed to be bailed out from! Isn't it interesting, when the question came to the common folk who were victims of the schemes of the Wall St. banksters and needed some help to maintain a roof over their heads, the Senators, Congress critters, and banksters almost uniformly shrieked “Moral hazard!”, “Moral hazard!” And yet, when it comes to bailing out the very people most responsible for creating the situation and circumstances that have led to the current disaster...”Listen to the sounds...of silence.”

This was unseemly and unbecoming because, without any shadow of doubt, all of the Senators and Congress critters are far wealthier than the average American and many are heavily invested in Wall St. and were, therefore, voting their own interests rather than acting as “representatives of their constituents”. Were this in the judicial arena, virtually the entirety of the Senate and House would have to recuse themselves for “conflict of interest”!

What has been shown by these last two weeks, to any who had any doubts, that the current system of government is broken; totally, completely and irremediably broken! What I find terribly disturbing was a comment from Brooke Gladstone on PBS's “Bill Moyers Journal”:

BROOKE GLADSTONE: Rather than trusting the leaders to make the decisions that we elected them to make.” (emphasis mine)

And, though it doesn't come out from the transcript, Gladstone seems disturbed that the people aren't trusting their “leaders”! As I recall, this country was established as a “representative democracy”. The reason it was established as a representative democracy and the citizens had to “trust” our “leaders” “ makes the decisions that we elected them to make.” is because communications were limited to the speed of a horse and even the original 13 colonies covered a large enough territory that communications between constituents and representatives were not feasible in any sort of timely manner. Today, in the era of instant communications, the “peoples' representatives” need to be much more responsive and attuned to the sentiments of their putative “bosses”, their constituents. As it is, these last two weeks have dramatically shown that the “peoples' representatives”, both Republican and Democratic, take their marching orders from their true bosses, the F.I.R.E. Sector and Wall St. and to Hell with the desires of those that actually put them in office!

At this point all I can suggest is that each and every one of the Senators and Congress critters who voted for the “bailout” and is vulnerable to election should be summarily removed in the upcoming election and replaced by someone who understands who the true bosses in a representative democracy really are!

1 F.I.R.E. Sector = Finance, Insurance and Real Estate.

Wednesday, October 01, 2008

Le Roi est mort! Vive le Roi!

(Updated below)

Well, according to the latest news, the trillion dollar bailout has ground to a halt. Now, the Fools on the Hill (i.e., the Democrats) are laboring mightily to resurrect the stinking, rotting corpse. To that I say, “Le Roi est mort! Vive le Roi!”

It is more than middling odd to see Sellout Pelosi prancing and preening for the cameras, promising that the bailout WILL be finalized before the end of the weekend. I say more than middling odd inasmuch as both congresspersons and senators, both Democratic and Republican, are reporting that they have received an avalanche of e-mails and faxes in the past few days. And, according to these representatives and senators, that avalanche of correspondence is running 100 to 1 AGAINST the bailout. And yet, here is Speaker Pelosi, Majority Leader Steny Hoyer, Congressman Barney Frank, Senator Dodd et al., all strutting around, pleased as Punch that they are crafting a bailout package that their constituents are adamantly against! And people wonder why Congress has a disapproval rating between 73-78%?!

This is supposed to be a “representative democracy”, right? So, just who are the Congress critters and senators representing? It is most obvious that they are not representing the people who voted them into office! Perhaps they are representing their true constituency, the mega-wealthy and the FIRE sector, the people who have bought and paid for their representatives (both Congressional and Senatorial) and by God, their bought and paid for shills had better produce!

We hear, repeatedly, just put the Democrats back in charge and all will be well. What a crock! In 2006 the voting public massively voted against the Republicans and, by default, for the Democrats. Have they ended the occupation of Iraq? No! Have they dismantled the so-called “Homeland Security” apparatus whose prime concern seems to be the persecution of domestic dissent? No! Have they ended the disgrace that is Guantánamo? No! How about holding the telecommunications giants as well as the Bush (mal)administration to book for the blatantly illegal spying on the American public! Hah! The Democrats bent over backwards to bend over backwards! Even though on that issue as well, the public was clamoring NOT to grant blanket retroactive immunity, our “representatives” discarded any appearance of representing their voters.

We are told by the Pelosis and Immanuels that the most important thing is “to elect more Democrats”. To what end? When the positions held by the Democratic establishment are virtually indistinguishable from the positions of the putative opposition, the Republican establishment, why bother to “vote Democrat”?

As The Who said so well back in 1971:

I'll tip my hat to the new constitution

Take a bow for the new revolution

Smile and grin at the change all around me

Pick up my guitar and play

Just like yesterday

Then I'll get on my knees and pray

We don't get fooled again

Don't get fooled again

No, no!


Meet the new boss

Same as the old boss

Smile; we've been so fooled again!


Shock! Seems some of the Fools on the Hill may not be as foolish as I thought. In response to a veritable flood of e-mails and faxes the “bipartisan” bailout of Wall Street as gone down in flames.

As Speaker Pelosi pointed out, "The legislation may have failed; the crisis is still with us." This is true, but, that being the case, I would offer the following as a basis to rectifying that crisis.

  1. Scrap the Paulson plan, period. From its inception, the Paulson plan has been of Goldman Sachs, by Goldman Sachs, for Goldman Sachs. There is every good reason to believe that Paulson's rushing to the rescue of AIG was owing to the fact that, had AIG folded, Goldman Sachs would have gotten pennies on the dollar. Nuff said.

  2. Any bailout plan for Wall Street MUST include a rollback of personal bankruptcy protections to the status quo ante of the punitive Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Or, going one better, analogous provisions of that Act should now be imposed on the CEOs and executives of any Wall Street entity seeking a government bailout.

  3. Provide for at least a foreclosure moratorium for homeowners earnestly attempting to retain their homes and attempting good faith efforts to continue to pay at least payments with which they were enticed into purchasing/refinancing their homes.

  4. As part and parcel of any government bailout, executives of any entity being bailed out must return to the Treasury any monies in excess of $1,000,000 per annum in pay or compensation received for each of the preceding 7 years. If that means they must divest themselves of that “cute” ski chalet in Steamboat Springs or their summer “cottage” in Gstadt, so be it.

  5. For the duration of the bailout, all CEOs and executives of any of these entities would be required to work for minimum wage until that entity is stabilized. If it's good enough for California's public servants, per Herr Schwarzenegger, why then, it should be fine and dandy for the high flyers who, through their own actions, caused the mess from which they now beg to be bailed out.

  6. Start a pool to which Wall Street firms will “voluntarily” donate contributions to aid in the bailout. As we are so often told, our taxes are “voluntary” payments to fund the government; let Wall Street “voluntarily” aid themselves.

The above is far from a comprehensive list, however, it does provide a basis from which the Congress can start crafting some semblance of a viable bailout which will not favor the same gimlet eyed gamblers who benefited so handsomely while driving the economy off the cliff while further impoverishing the already stressed and strained taxpayer.

Byzantine Blog