Aside from the fact that the recount had Gore winning FL statewide, and it's no surprise that he lost his home state (I can understand that, as I've lived in that bumpkin state, unfortunately), and that legions of constitutional scholars and more than half the country were stunned at the unprecedented partisan meddling of the US Supremes appointing their Love Child shrub to office, we obviously agree on just about nothing.
Bushenron's only hope to maintain office is a focus on the war. Just like Daddybush. On the war, I wish him well. On the focus, I can only hope that we do not encounter more events of such a climactic scale.
The issue that will dominate the next few years (barring suitcase nukes from the terrorists, we all hope) will be the continuing shocks and surprises of a false economic recovery, and eventually Curious George will take the rap. The light will shine fiercely on the game that the corporatocracy and the Bushenron thieves and big contributors have been playing as they purchased and pilfered our government, while diverting attention to other silly issues that for them were but a convenient excuse to siphon off the votes they could not otherwise win.
The realization that a stealthy class warfare has been invoked by the elites upon the average American will solidify, culminating in the election of a government finally responsive to the average American, not the elite tricksters. And that is why I have hope, in spite of the hijacking of the government by the corporatocracy.
If my prognosis turns out to be mis-timed, the spoonfed, soundbite yearning masses may yet put the bubbly chump back in office, this time with a legitimate election (as long as Harris is banished from her FL post). However, I think soon enough the evidence will be sufficient to awaken them to the reality of this fully apt summary : "Everywhere life’s illusions are all of the same sheer stuff; variety is a trick of refraction." Hmmm, the words "fiat money" may even appear in the mainstream headlines some day.
Ironically, many of those who've come to this view are the true conservatives, who have for some time and with growing consternation been tracking the deceptions of the elite corporatocracy's thievery, as supported and applauded by the Republican party. These are not the Trent Lott "best government money can buy" types. A few samples :
mises.org
Popular delusions pepper human affairs both past and present. And perhaps nowhere is such folly so liberally sprinkled as in matters of
money--particularly when it comes to the nature and the consequences of credit. As the economy sputters along, various commentators and politicians tell
us that the way out of this mess is to lower interest rates, increase spending, and, consequently, take on more debt.
One long-departed writer who was able to penetrate this soupy fog with great clarity was Garet Garrett, particularly in his book A Bubble That Broke the
World, which first saw the light of day way back in the summer of 1932. By then, Garrett was already a seasoned newspaperman and salty critic of fiscal
insanity.
"Since John Law and his Mississippi Bubble," Garrett noted, "individuals have been continually operating with the same scheme in new disguise." This
was the credit delusion, in which debts never had to be repaid and prosperity could be created out of thin air with easy money. Ever the student of the
history of bubbles, especially with regards to the explosive combination of paper money and its government backers, Garrett saw that the "general shape of
this universal delusion may be indicated by three of its familiar features."
The first of these is "the idea that the panacea for debt is credit." In other words, the delusion that the best way to relieve debtors is to make it easier for
them to acquire more debt. Greenspan and crew have been hard at work in this department, pushing down interest rates and pumping the economy with
money. In one year, the Fed Funds rate has been pushed from 6.75 percent all the way down to 1 percent.
The money supply also continues to expand. The so-called "Broad Money Supply" (M3) has increased by about $1 trillion dollars, or 14 percent, over the
past fifty-two weeks. Borrow! Spend! Dallas Fed Chief McTeer urged us all to hold hands and buy SUVs. They have helped foster a culture of spenders and
debtors. As has been widely reported, the average American pool of savings is paltry, even by our own standards (forget comparisons with the Japanese).
It used to be that people would make the argument that the rising stock market served to understate the true savings rate. Well, after nearly two years of
falling prices, that argument no longer has merit.
The second familiar feature is "a societal and political doctrine, now widely accepted, beginning with the premise that people are entitled to certain
betterments of life." Entitled, that is, even if they can’t afford them. Therefore, credit should be made readily available so that people can acquire homes,
cars, and other things. The government and its GSEs strive to make it easy for Americans to buy homes by providing a ready market for mortgages and
subsidizing the industry with tax advantages and its implied guarantee. The GSEs now hold more than half of domestic mortgages, for example. Most
people seem to believe that it is best for everyone to own their homes, costs and risks aside. The consequence of this type of thinking is, of course, more
debt.
The third of Garrett’s familiar features is "the argument that prosperity is a product of credit." With this, economic thought is ignored and, indeed, it invites a
certain hostility. It used to be that prosperity was the result of creating real wealth--making things better, providing services more efficiently, creating and
multiplying capital. Credit, or the availability of debt, is itself no creator of prosperity. The result of this thinking is that the real engines of prosperity are
neglected.
The common purpose of all of these features is to encourage debt, and indeed it has achieved the result. Debt as a percentage of disposable income, for
example, is as high as it has ever been, over 100 percent. As recently as 1990, debt represented 80-plus percent of disposable income. In 1982, it was in
the 60-percent range. (See Why the bear market is just beginning, by David Tice.)
Things are not much different in the corporate world; the average company has quite a bit of debt. As Moody's John Puchella notes, "The non-financial
debt-to-equity ratio has climbed from 77.4 percent at the end of 2000 to 81.2 percent at the end of September."
Is it not obvious what the fatal weakness of such a scheme is? Once begun, it cannot be stopped until it reaches its gruesome natural end. Garrett writes,
"when creditors fail to present themselves faster than old creditors demand to be paid off, the bubble bursts." This seems to be where we are now. The
average American consumer is a debt-laden mule. Easy credit and more debt will not help him.
At the heart of such a scheme--its sole logic--is that debt need not be repaid but postponed by increasing the debt of the debtor.
When the bubble bursts, what then? Garrett wrote, "then you go to jail, like Ponzi, or just commit suicide like Ivar Kruegar." Except our monetary system is
so infected, its malaise so advanced, only a radical makeover can prevent the endless vicious cycle of boom and bust.
When the bubble bursts, cash becomes king once again. People hold onto it a little more tightly. Debt becomes real again, no longer veiled by the illusion
of easy money.
Debt is great on the way up. You buy a house or buy stocks and they rise and your debt stays the same, accruing as it does some interest rate that is well
below the rate of your advancing stocks and appreciating home. But when prices fall, debt becomes a very cruel master. The prices of assets--that home
and those stocks--fall and the debt stays where it is, looming ever larger as your equity dissolves like antacids in water.
Message 16852585
Business Week JANUARY 2, 2002/ Where White-Collar Criminals Belong: Jail
WASHINGTON WATCH
By Howard Gleckman
Where White-Collar Criminals Belong: Jail
Crooks who defraud investors deserve the same punishment as the rest of the bad guys -- and the means exist to mete it out
The collapse of Enron is the nation's biggest financial scandal since the savings-and-loan failures of the late 1980s. What should be done about it? For
one thing, we need to rethink the role of auditors. And some lawmakers and investor groups are calling for a new round of securities regulation. But
they're missing the point. More rules aren't the answer.
What we really need is better enforcement of the regulations already on the books. If Enron's board, its top management, or its auditors did break any
laws -- and it's important to remember that there's no hard evidence so far that they did -- the best response is a simple one: Put them in prison. It will,
to borrow a phrase, discourage the others.
aei.org
Japan in Depression
By John H. Makin
While there is plenty of argument about where the U.S. economy is headed next year, the argument about Japan's economy is over. During 2001, Japan passed from
a prolonged and serious recession into outright depression. The bad news is that a depression in the world's second-largest economy will make it more difficult for
the world economy to recover in 2002. The (not very) good news is that depressions as acute as the one that has emerged in Japan do not usually last very long.
However, Japan's exiting its depression will require a large write-down of an unsustainable debt burden either through reflation or outright default. |
