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Published on Thursday, July 15, 2010 by CommonDreams.org
For the Economy, Help Is Not on the Way
TORONTO--Twenty years ago, in 1990, the American economy was in the third year of a deep recession. It was impossible to find a job. The 1980s housing bubble had popped; high-end housing prices in New York City dropped by 80 percent. Then, as now, the president seemed oblivious, aloof and clueless. Two years later, with no recovery in sight, angry voters turned him out of office.
But help was on the way. Something called the World Wide Web appeared in 1991. Two years later, Mosaic--the first graphic web browser, which would evolve into Netscape--was introduced. The Internet boom began. It flamed out seven years later, but in the meantime tens of millions of Americans collected new, higher paychecks. They spent their windfall. Consumer spending exploded. So did government tax revenues. When Bill Clinton left office in 2001, the Office of Management and Budget was projecting a $5 trillion surplus over the next ten years--enough to pay off the national debt and fund Social Security for decades. Unemployment had fallen to four percent. United States GDP accounted for a quarter of the global economy.
It's different this time. We are in a deep depression: calculated the same way as it was in the 1930s, the unemployment rate is the same as it was in 1934. Global credit markets have stalled. Investment has ceased.
And help isn't coming.
Despair oozes between the lines of media interviews of economists. Asked where the recovery will come from, they run down the list of theoretical possibilities, dismissing them one by one. The question remains unanswered. Which is, of course, the answer.
No one knows where the recovery will come from for a simple reason: It isn't coming. Not any time soon.
"A robust rebound in retail sales earlier in the spring had fueled hopes that consumer spending--which makes up about 70% of U.S. economic activity--would give a strong lift to the recovery. But now that is looking increasingly unlikely," reported The Los Angeles Times. "Households are not going to be the engine of growth for some time," Paul Dales of Capital Economics told the newspaper.
"In past recoveries, booming construction activity led the way, fueling spending and other economic activity. That's not happening this time," said the Times.
If there's some new technological innovation--like the Internet in the early 1990s--waiting in the wings, no one has heard or seen it.
Forget about Congress. The feds wasted hundreds of billions of dollars to bail out banks, insurance companies and big automakers who used our taxpayer money to give raises to their top executives and remodel their offices. Meanwhile, the stimulus that needed to happen--bailing out distressed homeowners, small businesses and individuals who lost their jobs--never happened. Now Congress is worried about the deficit. So read my lips: no new bailouts, not even one that might actually work.
Some think the U.S. could export its way out of the depression. But a radical restructuring of trade agreements and manufacturing infrastructure would have to come first, followed by years of expansion. U.S. policymakers haven't even begun to think about the first move. Moreover, the rest of the world isn't in a position to buy our stuff. The rate of expansion of the economies of China and Japan is slowing down. Germany and other EU nations are imposing austerity measures.
Globalization is key. Writing in The Wall Street Journal, John H. Makin argues that the actions of individual G20 nations threaten to bring the whole system crashing down in a Keynesian "paradox of thrift."
Makin says: "Because all governments are simultaneously tightening fiscal policy, growth is cut so much that revenues collapse and budget deficits actually rise. The underlying hope or expectation that easier money, a weaker currency, and higher exports can somehow compensate for the negative impact on growth from rapid, global fiscal consolidation cannot be realized everywhere at once. The combination of tighter fiscal policy, easy money, and a weaker currency, which can work for a small open economy, cannot work for the global economy."
Adds Mike Whitney of Eurasia Review: "Obama intends to double exports within the next decade. Every other nation has the exact same plan. They'd rather weaken their own currencies and starve workers than raise salaries and fund government work programs. Class warfare takes precedent over productivity, a healthy economy or even national solvency. Contempt for workers is the religion of elites."
One can hardly blame workers for fighting back. Two weeks after hundreds of protesters rioted at the G20 summit meeting, Toronto police are pouring through thousands of photos and are using facial recognition software to track down offenders. They have even released a Top 10 "Most Wanted" list and related pictures of activists.
Whether or not the anti-globalization protesters are motivated by the struggle for liberation and economic equality, they symbolize the industrialized world's best chance to prevent the economy from continuing its current process of slow-motion collapse. If the system cannot be saved by consumers, business or government, the system itself must be revamped and replaced. Late-period global capitalism's constant cycle of booms and busts is unsustainable and intolerable. States must regulate and equalize incomes, and control production.
If the cops were smart, they would track down and arrest those people who really are ruining the economy. They could start by listing and releasing the photos of the attendees of the G20.
But help was on the way. Something called the World Wide Web appeared in 1991. Two years later, Mosaic--the first graphic web browser, which would evolve into Netscape--was introduced. The Internet boom began. It flamed out seven years later, but in the meantime tens of millions of Americans collected new, higher paychecks. They spent their windfall. Consumer spending exploded. So did government tax revenues. When Bill Clinton left office in 2001, the Office of Management and Budget was projecting a $5 trillion surplus over the next ten years--enough to pay off the national debt and fund Social Security for decades. Unemployment had fallen to four percent. United States GDP accounted for a quarter of the global economy.
It's different this time. We are in a deep depression: calculated the same way as it was in the 1930s, the unemployment rate is the same as it was in 1934. Global credit markets have stalled. Investment has ceased.
And help isn't coming.
Despair oozes between the lines of media interviews of economists. Asked where the recovery will come from, they run down the list of theoretical possibilities, dismissing them one by one. The question remains unanswered. Which is, of course, the answer.
No one knows where the recovery will come from for a simple reason: It isn't coming. Not any time soon.
"A robust rebound in retail sales earlier in the spring had fueled hopes that consumer spending--which makes up about 70% of U.S. economic activity--would give a strong lift to the recovery. But now that is looking increasingly unlikely," reported The Los Angeles Times. "Households are not going to be the engine of growth for some time," Paul Dales of Capital Economics told the newspaper.
"In past recoveries, booming construction activity led the way, fueling spending and other economic activity. That's not happening this time," said the Times.
If there's some new technological innovation--like the Internet in the early 1990s--waiting in the wings, no one has heard or seen it.
Forget about Congress. The feds wasted hundreds of billions of dollars to bail out banks, insurance companies and big automakers who used our taxpayer money to give raises to their top executives and remodel their offices. Meanwhile, the stimulus that needed to happen--bailing out distressed homeowners, small businesses and individuals who lost their jobs--never happened. Now Congress is worried about the deficit. So read my lips: no new bailouts, not even one that might actually work.
Some think the U.S. could export its way out of the depression. But a radical restructuring of trade agreements and manufacturing infrastructure would have to come first, followed by years of expansion. U.S. policymakers haven't even begun to think about the first move. Moreover, the rest of the world isn't in a position to buy our stuff. The rate of expansion of the economies of China and Japan is slowing down. Germany and other EU nations are imposing austerity measures.
Globalization is key. Writing in The Wall Street Journal, John H. Makin argues that the actions of individual G20 nations threaten to bring the whole system crashing down in a Keynesian "paradox of thrift."
Makin says: "Because all governments are simultaneously tightening fiscal policy, growth is cut so much that revenues collapse and budget deficits actually rise. The underlying hope or expectation that easier money, a weaker currency, and higher exports can somehow compensate for the negative impact on growth from rapid, global fiscal consolidation cannot be realized everywhere at once. The combination of tighter fiscal policy, easy money, and a weaker currency, which can work for a small open economy, cannot work for the global economy."
Adds Mike Whitney of Eurasia Review: "Obama intends to double exports within the next decade. Every other nation has the exact same plan. They'd rather weaken their own currencies and starve workers than raise salaries and fund government work programs. Class warfare takes precedent over productivity, a healthy economy or even national solvency. Contempt for workers is the religion of elites."
One can hardly blame workers for fighting back. Two weeks after hundreds of protesters rioted at the G20 summit meeting, Toronto police are pouring through thousands of photos and are using facial recognition software to track down offenders. They have even released a Top 10 "Most Wanted" list and related pictures of activists.
Whether or not the anti-globalization protesters are motivated by the struggle for liberation and economic equality, they symbolize the industrialized world's best chance to prevent the economy from continuing its current process of slow-motion collapse. If the system cannot be saved by consumers, business or government, the system itself must be revamped and replaced. Late-period global capitalism's constant cycle of booms and busts is unsustainable and intolerable. States must regulate and equalize incomes, and control production.
If the cops were smart, they would track down and arrest those people who really are ruining the economy. They could start by listing and releasing the photos of the attendees of the G20.
© 2010 Ted Rall
- Posted in
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51 Comments so far
Show AllWe could export tons of oil-soaked sand. There is more oil in this than oil-shale rock of Colorado and it has suddenly become easier to obtain. We could even sell it back to BP.
The real unemployment rate is indeed the same as it was in 1934.
In 1934 we had FDR in the White House and he was fixing things.
Today we have Obama in the White House selling us down the river.
Does Obama have anything in common with FDR other than cigarette smoking ?
That's one of the big secrets - shhhhh. The unemployment rate - as tallied by our trustable government - is "9.5%." And the sheeple and the media parrot this figure and buy it no questions asked. I have a bridge in Brooklyn for sale, anyone wanna buy it?
The REAL unemployment figure is closer to 25%. It includes ALL adults who are unemployed, NOT just the ones on unemployment benefits. This is the big truth the government can't allow people to know: that over a quarter of Americans are out of work and slipping into poverty. And the number is growing.
Shhhhhhhh.
"When fascism comes to America, it will be wrapped in the flag, carrying a cross."
Sinclair Lewis, "It Cant Happen Here", 1935
"If there's some new technological innovation--like the Internet in the early 1990s--waiting in the wings, no one has heard or seen it." I disagree with this. There is so much we could do with sustainable energy/conservation, that we could have a booming economy if we would so choose. But, republicans would refuse completely and democrats know they would be wasting their time even if they were so motivated. The American electorate doesn't want a bunch of losers running their government, so doing something sensible is completely out of the question. Greed, power, and stupidity make for a powerful triumvirate.
I had a different reaction to that passage. My thinking was that if there *was* such an innovation, it might be invented here, even incubated here, but it would fly away to another location to be put into global use like everyother sector of manufacturing. This is the core of our problem. And elites of both parties would jam their portfolios full of stock and watch as the job slots get filled in other countries or, more insulting, importing the labor here to do it more cheaply.
That's called a bipartisan butt-pounding.
"that we could have a booming economy if we would so choose. ... so doing something sensible is completely out of the question." –(Greg R)
–America chooses a 'bombing economy' over a 'booming economy.' Every time.
You are also absolutely correct that doing "something sensible" in America "is completely out of the question."
In fact, nothing can be changed until the extremity of this realization (just how bad it really is) becomes internalized as an axiomatic truth.
Where false consciousness and false politics–including bourgeois (capitalist) environmentalism and electoral politics– are carried out with the trash, never to return.
Only then can a concomitant political consciousness arise in an exigent resistance.
For example, merely 'ending' the rampant malaise of America's imperial wars is not enough; the very infrastructure (economic, social, and political) of this catastrophe and those who facilitate it, must be–to be polite–de-configured, or even deleted, in the equation.
And as permanently as the endless wars they dream of and continue to manufacture.
"Father," he asked, "are the rich people stronger than anyone else on earth?" 'Yes, Illusha," I said. "There are no people on Earth stronger than the rich." "Father he said, "I will get rich, I will become an officer and conquer everybody, the Tsar will reward me, I will come back here then no one will dare..." Then he was silent and his lips still kept trembling. "Father, he said, "what a horrid town this is."
–(Dostoyevsky, "The Brothers Karamazov.")
Government is what voters choose to make it out to be.
Barry is more like HOOVER.
President or vacuum cleaner?
Laugh out loud. Or it could be the Dam in Arizona, since Obama's well marketed persona serves as a dam against the Kucinich types who likely would, if given power as a result of the economic collapse, institute real reform and real relief for the economy.
Any way you look at it, President Obama is a Hoover.
"the Kucinich types who likely would, if given power as a result of the economic collapse, institute real reform and real relief for the economy." –(tremaine)
Please, try to 'get real.'
Disabuse yourself of this fanciful notion and misplaced hope. The 'front door' is closed and so is the 'back door.'
It is very simple: Anyone ever 'elected' to the American Presidency would do nothing to help 'the economy' of ordinary people; that is a contradiction in terms. That is what America 'does' and 'is.'
In an economic collapse there would only be more tangible evidence that 'the other foot' of fascism has finally dropped.
There are no 'Knights in shining armor,' coming to the rescue in America.
If an election was even indulged amidst an economic catastrophe, the American electorate would vote in a fascist dictatorship despite the ensuing immiseration of their daily lives.
Very pessimistic, but unfortunately I must agree with you. Our system is set up to ensure that no such "white knight" President is ever elected. The corporations that control campaign finance and the U.S. Government and its Congress would never permit anyone not properly vetted beforehand to become President, if they had even a hint of putting the average American worker ahead of corporate profits. And if one slipped through somehow, he would be assassinated post-haste, ala JFK.
It would not be permitted.
"When fascism comes to America, it will be wrapped in the flag, carrying a cross."
Sinclair Lewis, "It Cant Happen Here", 1935
VashkarKim - THANK you for your highly realistic and useful observation. There's something in human psychology that wants to be told what to do. It's like an abusive relationship. We have to get past our anger and frustration, to the point of indifference and just walk away. Like Paul Simon's song, hop on the bus, Gus.
The key to freedom is to escape from the bills, in the mailbox. Until you stop paying bills, and stop working for money, there's no exit. I have been all round the prison walls, checked all the doors, they're locked.
We do have marvelous tools for reorganizing ourselves without money. Tools which have never existed. A peer-to-peer internet. Apache and Firefox. Our cellphones and skype etc. and our marvelous workgroup software-- open source and free. So, why do we need a money system? We need the banksters and NY-WashDC like a fish needs a bicycle, wake up, walk out and live!
Obama has a lot of Hoover in him, no doubt about it.
But Obama also has a slippery quality that Hoover lacked. Hoover did not pretend to be one thing, then pull a massive bait and switch, as Obama has. In that respect, Obama is more like Nixon--actualy far sneakier than Nixon.
The biggest bubble of them all is bursting, that of the fake instruments engineered by banks/Wall St. to pass for money or a sound currency. There is a silver lining in the cloud of global financial austerity. It will hopefully mean a break for Gaia, The Earth Mother. It may cause a slowing down of rabid resource depletion, the ethos that is killing our world, ecosystem by ecosystem, at break-speed.
In the West most of us have more than we need. I've lived close to the poverty level for much of my adult life and I still have more than I need in the way of books, clothing, shoes, etc. Studies have been done (a notable one by Robert E. Lane) that show that most citizens value loving relationships over material things. Other studies (I have no available links, sorry) indicate that once a society exceeds a certain level of financial security, its "Happiness Index" stops growing.
The Indigenous understood how to find the sacred in the simple; and the adage, "Live simply that others may simply live" could not be more timely, or necessary.
" Does Obama have anything in common with FDR beside cigarrette smoking?"
Not much, he has a (D) behind name and he's a great orator, even inspiring (when listeners suspend disbelief). But other than those things, nope, no comparison. I sometimes think the few reasonable conservatives out there are right. Maybe we should have had a full depression and let the economy collapse completely like in the 30s. Then there would be no argument about the need for radical change and if the corporatists had pushed too hard against it then we would have had revolution.
But in my heart I can't wish for that kind of suffering on the part of innocents and there's no garruantee that then (or now for that matter) that a depression wouldn't instead produce a full-force fascist government instead of the soft one we have now, which allows some individual freedom of speech.
A government that "allows some individual freedom of speech" is worse than one that allows none. The limited freedom of speech approach is called propaganda as "abberant voices" are marginalized or otherwise silenced.
Too true.
I'm not convinced that the economy can't still completely collapse. I have not seen the story here nor on FluffPo -- maybe it was so small, no one cared -- but on NPR this morning there was a story on a third wave of foreclosures coming. It was called "unprecedented." The whole thing was very pessimistic. NPR has had a couple of very good stories on lately tucked in between all the corporate propaganda. One was tucked in two Saturday evenings ago. If you blink you would miss them. They are now tentatively saying that recovery in the housing market might start in 2013 (when the current backlog of inventory as it stands right now returns back to normal levels), but tentative was the operative word -- and they didn't sound very optimistic about it.
You're spot on. If you want to get your hands on some real data regarding the long-term economic trends check out "Crash Course" or "Capitalism Hits the Fan" on Youtube.
They are higher than kites. There will be no "recovery in the housing market." Ever. Houses are not going to just magically be bought. People have to have jobs - and by jobs I mean GOOD jobs, with GOOD wages, i.e. MIDDLE CLASS JOBS - in order to buy homes, and cars, and all the other consumer crap that fuels the economy. There will be no sudden boom of good paying middle class jobs. EVER AGAIN.
The Corporate domination of our government is just about complete. Corporations' religion has reached is zenith: profit, profit, profit, at the expense of everything and everyone else. Screw the worker, offshore manufacturing and every conceivable good-paying job to 3rd world countries so they can lower their bottom line and increase PROFITS. Fuck the worker, fuck decent pay, fuck unions, fuck benefits. This is the Corporate - and thus the U.S. government's - mantra.
It will NEVER get better. The economic recession we are in right now is not going to disappear. This is now the new status quo. Get used to it.
"When fascism comes to America, it will be wrapped in the flag, carrying a cross."
Sinclair Lewis, "It Cant Happen Here", 1935
the problem we're facing isn't a dying economy...it's a dying planet due to our economy...
economy and planet cannot coexist...current trajectory would see the end of both...
Exactly. In order to have even a slim chance of preventing massive devastation of the environment, the economy must collapse, and quickly. We have to stop worrying about jobs and start worrying about whether there will be a viable ecosystem to support life, including any human life.
Don't think about whether you will have a JOB- you won't. Think about what WORK you can do to help make your community resilient, and able to provide for its citizens' basic needs as much as possible while using about 80% less energy. And I'll give you a tip- alternative sources of energy are not going save anything. Too little, too late, too expensive, not scaleable, and in the very best of circumstances all alternatives combined will only provide up to 20% of what we use now.
Agreed Dubet and Kate. What you say about alternative energies is spot on. Peak Oil= the end of Cheap Energy and the beginning of the end of limitless exponential economic growth.
Here's a quote from an unlikely source regarding credit bubbles that describes the industrialized civilization bubble just as well in many respects (parentheses are mine):
"There is no means of avoiding the final collapse of a boom brought about by credit expansion (exponential growth of every significant metric you would care to measure: population, debt, resource consumption, # of dollars, species extinction, ecosystem degradation, water consumption). The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment (we wake up) of further credit expansion, or later as a final and total catastrophe of the currency system (society) involved."
- Ludwig Von Mises
dubet, you have nailed it. Our neverending "growth" economy is unsustainable for this planet, and therefore insane!
"Some think the U.S. could export its way out of the depression."
–(Ted Rall)
America 'exports death,' which starts as an abstraction and ends concretely, in a pool of blood, to be licked up by feral dogs in the streets of faraway lands.
How can that ever be reciprocated in trade?
"Late-period global capitalism's constant cycle of booms and busts is unsustainable and intolerable. States must regulate and equalize incomes, and control production."
Ted Rall is mixing some good and some bad stuff in his article. I like the idea of tracking down elites, handcuffing them, and putting them on trial for crimes against humanity.
But Rall's basic idea that we need the government to create jobs is a recipe for further disaster. Rall and others create an illusion that the government is the answer when the truth is that it's only a tool, and only useful to the people when the people wield it, and wield it judiciously.
We're not even close to grasping the tool today, let alone wielding it effectively. And so you see Rall et al are misdirecting us, and confusing us.
The above quote contains two sentences -the first one is the relevant truth. The boom/bust cycles are created by thug elites and manifest as serious distractions and outright damage to millions of people.
The second sentence is as stupid as it gets. Rall should be ashamed. States should not control production. The people MUST control production. Individuals should 1.) own a small chunk of production and 2.) exchange only with peers who also own small chunks of production.
We arrive at this and all conclusions by applying Kant's Categorical Imperative: It's the correct thing to do when everyone thrives when everyone does it. The prescription I just provided enables everyone to thrive so it's the correct thing to do.
In contrast, Rall's prescription leaves everyone vulnerable to oppression/enslavement at the hands of elites. Is the evidence not abundant?
"But Rall's basic idea that we need the government to create jobs is a recipe for further disaster."
–(rtdrury)
"The very existence of the state demands that there be some privileged class vitally interested in maintaining that existence. And it is precisely the group interests of that class that are called patriotism." - Mikhail Bakunin,
Perhaps Ted Rall is talking about 'a government' that we cannot, as yet, imagine: A government where there are no states. I suspect your position and Rall's are closer than you would suspect.
But you are absolutely correct that elite domination is all but guaranteed under the auspices of the present and extant political and economic structures. Some food for thought. To wit:
"That which produces the general good is always terrible." –(Saint-Just)
"Communism is not love. Communism is a hammer which, we use to crush the enemy."
–(Mao Tse-Tung)
"The dictatorship is necessary because it is a case, not of partial changes, but of the very existence of the bourgeoisie. No agreement is possible on this ground. Only force can be the deciding factor" –(Leon Trotsky)
Problem is as economies worsen jobs such as those of police become more sought after. If things continue to deteriorate with more public protests it means more work for the police as there
is a brisk business in crowds control. Cops are all for more of that. More overtime pay from crowd control. More funding being funneled for high tech surveillance equipment with greater success in tracking down and arresting potential suspects is also good for the business of policing and the purveyors of these technologies. A win-win for Big Brother and the corporations selling the hardware.
In Toronto the police staged some incidents to make things seem more extreme than what was actually happening. A clear case of media manipulation to perhaps bolster law enforcement's hopes of getting bigger, badder crowds control and surveillance hardware. Whether it's Toronto, Beijing, Chicago, etc. the heavy handed tactics of policing/crowd control are all eerily similar and stringently anti- free speech. Can you say 1984, Orwell?
Yeah and think how easy it must be for them to track faces now. As you read the article a banner of faces courtesy of facebook adorns the screen. Faces, tagged faces, dates, where you were, who you were with, what time of day. You don't even have to be the one taking the pictures, could be anyone in the crowd. Social networking cites and cell phones have escaleted the grid to new heights. Big Brother only had TV's and shit, now there are free services where everyone can provide the needed info willingly, in real time. It's an almost perfect surveillaince system because it's so voluntary.
"If the cops were smart, they would track down and arrest those people who really are ruining the economy. They could start by listing and releasing the photos of the attendees of the G20."
–(Ted Rall)
–A bit tepid, if not innocuous, but certainly more visionary and futuristic than what is usually suggested. However, one must 'cut to the chase' :
"People do not judge in the same way as courts of law; they do not hand down sentences, they throw thunderbolts; they do not condemn kings, they drop them back into the void."
–(Maximilien Robespierre)
There is no help on the way, because the people of this country insists on voting for the same 'leadership' that voted for the $700B swindle (before the presidential election). Amazing examples of bi-partisan stupidity abound, but that $700B swindle was as clear as it gets. It the way this people want it.
whocares;)
You're exactly right. As long as the American sheeple continue to alternate between voting "D" and "R" - which are the EXACT SAME PARTY, just with slightly different rhetoric - the vicious cycle will never end.
I love how people bitch about the Dems not doing anything right, but then they vote "R" and bitch about them not doing anything right, then 4 years later vote for the "D"s, and then bitch about how things haven't changed. Well...DUH. Yet, it never occurs to these saps that maybe - just possibly maybe - the 2 parties are one and the same.
The definition of insanity is doing the same thing over and over but expecting different results each time. That is the exact definition of what Americans do every time they vote. In other words, Americans are freaking insane.
You get what you pay for. America has EXACTLY the government it deserves.
"When fascism comes to America, it will be wrapped in the flag, carrying a cross."
Sinclair Lewis, "It Cant Happen Here", 1935
Ted Rall is in the right ballpark.
That global capitalist economy is over now. Why? For one, because globalization was so successful in its brief heyday. It penetrated every market on the planet. It stomped out the Soviet Union and took control of the Russian economy. And who ever imagined China, closed off to the West not thirty years ago, could become the largest market for a big-ticket consumer good like automobiles by 2009? For another, globalization found the absolute lowest wage possible in the undeveloped world. The profit addicts bumped right up against outright slavery and where possible went over the edge. Today more human beings are in bondage than anytime in human history. There's no more blood in that turnip.
But the system's success exhausted the possibilities for growth. And growth is its lifeblood. Growth kept it healthy and dynamic. When that growth became impossible capitalism turned inward. It began feeding on itself. That's when Wall Street turned Bear Sterns and Lehman Brothers and the other investment banks into casinos. That's when M.I.T. trained mathematicians were summoned to make investment vehicles into computer generated logarithms beyond human comprehension. Since no more real wealth was being created the bankers were forced to resort to alchemy, in the form of derivatives, to give the appearance of wealth creation.
Because we are bombarded with it by the corporate media, there is the temptation to believe the global economy will enjoy a "recovery" and the US will visit even greater heights of material prosperity. This is a delusion that is being foisted on the American people. It's part of a scam. There is no rational reason for this system to be revived and there are oligarchs, and people at Goldman Sachs, and people in the US government and military that know this. There will be no recovery!
Malcolm: Exceptionally lucid and accurate assessment. Many thanks!
True, and the planet needs to cool off.
WE ARE GENERATING TOO MUCH HEAT ENERGY.
This is not simple, the system is not going to change much even after another collapse... We are small units on a small finite planet in an infinite universe that is aware of us only by the small tug of our tiny gravity dragged along by the beautiful, mysterious all powerful force of nature, the universe.
We know more about how atoms behave than we do about how best for life to live with nature and each other.
Maybe we'll get lucky.
It's easier for some people to heat up than to cool off.
So in a seemingly obscure article at a seemingly obscure website, you can finally find an accurate one paragraph summary of the far right response to the economic collapse, to wit:
[quote] Adds Mike Whitney of Eurasia Review: "Obama intends to double exports within the next decade. Every other nation has the exact same plan. They'd rather weaken their own currencies and starve workers than raise salaries and fund government work programs. Class warfare takes precedent over productivity, a healthy economy or even national solvency. Contempt for workers is the religion of elites." [unquote]
This is exactly what is happening: total contempt for literally hundreds of millions of people; the assumption by elites (including the entire Obama administration) that if you are not yourself an elite something is wrong with you.
That's exactly what jumped out at me too. "If you're not an elite,something's wrong with you", isn't that just the way a sociopath would respond? These elites don't get it, that the problem with the world is THEM, and their predatory ways.They believe what they do is normal, and that WE're screwed up for not being the same way as they are. As I've said before: the conservative/libertarian right has been one long, arrogant, exercise in treason & betrayal of everything good & decent.
The globalist banksters have one hope for recovery of the economic system they dominate: looting Iran.
And I would like to add this to your comment: Recently there has been a spate of American news stories about the "undervalued Chinese currency". Well, presently I am living in China and recently made a trip to Thailand. My thinking was, "If the Chinese yuan is undervalued against the US dollar, then I will get a better exchange rate for yuan to Thai Baht than dollars to baht." To hedge my thinking, I took both dollars and yuans to Thailand. Thank goodness, as the exchange rate was much better for dollars than yuan. I would have lost over 30% had I not had dollars. So, it seems to me that the dollar is undervalued against the yuan.
On another note, I recently read a letter to the editor in a Chinese newspaper saying this in so many words: "The same people who crashed Wall Street are the same people saying the yuan is undervalued against the dollar." It made a lot of sense to me.
Dizi, I don't think that your limited experiment/experience is a true indicator of the value of RMB for two reasons:
1. RMB are still pegged and do not float freely, which is what would allow for differences from place to place. Letting it float is what is being called for but the PRC is too smart to let that happen. As long as it is pegged, then there is little room for the arbitrageurs to do to them what they did to several other Asian countries in the late 1990s.
2. RMB are not freely convertible and there are restricted locations where it can be used/deposited. This makes it unattractive to shops if you are not in China.
Since I am in Hong Kong, I have put a portion of my savings in RMB and believe me, that is the only money that has appreciated, without falling, over the past five years. I think if you are in China, it's a good investment, but not good for using outside. (The low rate of exchange in Thailand may be an indication of how tourist areas can take advantage of Chinese tourists who have no other choice on what type of funds they have to spend.)
When/if you are ready to leave China permanently, then you can exchange your RMB for USD or whatever you want before you leave. I suggest you do that at your bank when you close out your account. China used to (may still do) make you show your RMB receipts before you could change them to another currency, doing your change through your bank ought to take care of that.
OK, so explain to me why the same folks that crashed Wall Street want the yuan re-valued.
I am not rich, but make a good salary when I work, which has been only 15 months since Jan 2002. I invest a little and give way more than 10% to charity. I think I understand the yuan and dollar better than you, but I might be wrong.
I would imagine that they are interested in lowering the trade surplus that is currently in China's favor, consequently lowering the trade deficit that the USA and Europe have. Revaluing the RMB, if it were to increase in value, as they expect, would have that effect. It also puts China at risk of speculative manipulation. This is pretty basic so I am not sure why you are asking. What's your idea?
And just what makes you think you have any more information or understanding than I do of such matters? There is nothing in your current or previous post that lends credence to that claim.
What's my idea? That China should do what is best for China and not worry about the US and/or Europe. And if the yuan is truly undervalued, major banks would get their hands on all of it they could and then make it an internationally traded currency.
The US and Europe has exploited and stolen from many countries, especially in Africa and S America, therefore their standards of living are increased by taking advantage of weaker nations. Maybe it is China's turn to flex their muscles.
I admit, I understand very little about economics, but I do well with logic. So, as Mr Spock might say, "Something about all of this talk about the yuan being undervalued is not logical." Sort of like Reagan and the Bushes talking about tax cuts and balancing the budget and reducing the size of government - they all saw massive deficits and government grew larger - so what they said was not logical. Sort of like Saddam being able to attack the US with WMD's when he could not beat Iran in a war. Just not logical.
And, I will admit this, you seem to make an argument much better than most of the posters here on CD.
From 1933 to 1980 we suffered zero bubbles in our economy, no financial bubbles, no housing bubbles, not one. But since Ronald Reagan we have had the savings and loan debacle, the dotcom bubble, the housing bubble, the Wall St. and banking bubble, plus the one bubble that is driving our economy and our country into the ground faster than any other bubble, the Military, Industrial, Congressional Complex bubble! So what was it about 1933 to 1980 that was so different from 1980 to 2010? One thing was that big business was regulated to the hilt. The time period when this country was most prosperous was roughly between 1950 to 1970 which happens to correspond with the largest amount of labor unionization in the history of this country, roughly 35% of the national work force was unionized! Plus at the time between 1950 to 1970 was also the time when the top tax rate for individuals was between 70% to 90%. Just remember, a 47 year period without any major disruptions to our economy, where the most our economy suffered were minor recessions, not major volatile swings like the near collapse of our entire economy!
So what is the answer, I would say that going back to the way things were before Ronald Reagan would be a good start. Public funding of federal elections would be another idea!
Draw your own conclusions!
Well stated, and precisely on the nose. The ONLY reason America ever prospered was because - for about thirty years there - was workers were paid good wages and had good benefits, in other words: THE MIDDLE CLASS. America's economic "greatness" was built on the creation of a huge, vibrant middle class. PERIOD.
When tens of millions of Americans had good paychecks, they could all live in decent homes, drive 1.5 cars, and spend the surplus of their income on consumer crap, invest, save, send their kids to college, and in short: fuel our great economy.
With the deliberate destruction of our manufacturing base, by "offshoring" millions of middle class manufacturing jobs to foreign countries; eroding wages and benefits deliberately; working hard to dismantle union representation; and putting higher and higher and higher corporate profits above any- and everything else no matter WHAT - America is destroying its Middle Class, the very thing that forms the foundation of our nation.
When people don't make enough money to afford to buy the house, the 1.5 cars, send the kids to college, invest, save, and buy consumer crap: this is what you get.
The sad irony is that the rich, elite, corporate-controlled Congress can't even SEE that the Middle Class is the foundation of America's former greatness, and they are working very, very hard to finish it off. When that is complete - in about 2-3 decades would be my guess, then we will have hundreds of millions of poor Americans, and a tiny number of rich elites. I.e.: a third world nation.
We're well on our way.
"When fascism comes to America, it will be wrapped in the flag, carrying a cross."
Sinclair Lewis, "It Cant Happen Here", 1935
One of the quotes from Obama yesterday:
"They're going remember the policies that got us into this mess as well," Obama said, referring to the previous Republican administration. "And they sure as heck don't want to go back to those."
Oh, good grief.
And here's this piece of elitist garbage:
"It's hard because you don't see immediate gratification," the president acknowledged Thursday. He said his message to people out of work was that his administration was doing everything possible to create an environment in which private sector jobs could expand.
"But I'm not any more satisfied than they are," Obama said. "And until they can find a job, I expect to be held accountable."
And there we have it. Americans are looking for "immediate gratification."
Well, a family down the block from me just lost their home. There was no "for sale" sign put up prior to this. Last weekend a POD appeared in the driveway, then furniture and TV and other items with signs that say "free, please take." This is what happens in many places on Long Island now, especially in so-called "wealthier" areas like Three Village. There are no signs placed that scream "foreclosure," just silent pain until the last minute.
On my way home yesterday I noticed another family with a POD in their driveway, a dumpster and lots of activity. There are now at least five vacant homes in my working-class neighborhood, there are at least four homes for sale that have now been on the market for well over a year or more. On other main roads that I travel I am now seeing two or three homes in a row with "for sale" signs on them.
All I know is that as I walked by this home I finally broke down in tears. There are a lot of Long Islanders in denial, but the speeding-up of this depression is catching up for those who just have eyes to see.
Been knowing that for decades and I've been on my own despite government robbing us.
What does a deepening recession, perpetual war and accelerating global warming tell us? That the system is tanking, that's what. Which means that it doesn't matter who gets elected this November nor in 2012, cause we're almost at the abyss and time's running out. What matters is that we rise up en masse and change the world. And TINA!