Friday, August 15, 2008

The glass isn't half full or half empty. It's empty.

James Quinn has an asteroid-striking-the-financial-world piece at Seeking Alpha, the interesting site devoted to exchange traded funds, titled "The Great Consumer Crash of 2009." You'll feel better for reading it, I'm sure. Says he:
By 2005 practically everyone had a large automobile and a beautiful house. By 2010 many of these people will be asking where is that large automobile and will realize as the sheriff escorts them out of their house that this is not my beautiful house. There is plenty of blame to go round for this predicament. According to Northern Trust economist Paul Kasriel, “We’re a what’s my monthly payment nation. The idea is to have my monthly payments as high as I can take. If you cut interest rates, I’ll get a bigger car.” Major banks offer credit cards using your home equity as a way to pay everyday expenses like groceries, gas and clothes. Eating your house was never so easy. …

The last thing that anyone thought would result while watching the Twin Towers collapse on September 11, 2001 was the greatest housing boom in the history of the world. When a country goes to war, it usually asks its citizens to sacrifice.

“I have nothing to offer but blood, toil, tears, and sweat. We have before us an ordeal of the most grievous kind. We have before us many, many months of struggle and suffering.” (Winston Churchill – May 13, 1940)

In the true spirit of Winston Churchill, President Bush could have paraphrased Churchill by saying: I have nothing to offer but tax cuts, tax rebates, 0% auto financing, and no-doc mortgages. Americans grieved for a few weeks and then did their patriotic part by buying everything they could get their hands on.
Most of his obituary for the years of living dangerously has been said before — not that there aren't plenty of Americans still oblivious to anything other than gas prices. Quinn does ignore the politically incorrect causal factor described by Steve Sailer, of the federal government leaning on bankers and mortgage companies to give loans to unqualified owners of brown and black skin, ultimately treating them to affirmative action bankruptcy. All in all, though, it's a tidy summation of the reasons you can expect a hair-curling depression, arriving on time on Track 09.

Photobucket

Such warnings, even if they turn out to be a scrap exaggerated, are timely and worthwhile. But life has to go on. What should we do about the mess we've created?

I'm afraid as the storm washes out the levees, to borrow Quinn's metaphor, the mass media will offer their readers and viewers advice that sticks to a few carefully scripted clich├ęs. Live within your means. Pay off your credit cards. Make a budget. Put tape around your windows to lower heating costs.

Well, duh. Yes, individuals — especially those who have spent frivolously with borrowed money — need to take a cold shower. Yes, you should pay off your credit card balances, assuming you have any zlotys to pay them with.

Photobucket

But while citizens (an archaic word that has been replaced by "consumers," and which needs to be revived) may have no choice but to learn responsibility, it shouldn't stop with them. Washington, and its 50 microcosms here and there, must take their medicine. I'm afraid on that side you will continue to see denial, clinging to bad practices, and resistance to penitence long after individuals have seen as much light as they have to.

May I offer a few "big picture" reforms that will help us as a nation get through the Slough of Despond and maybe even become a creative, solidly based society again?

1. Stop using our armed forces as agents of nation building, social work, bandage application for failed states, and referees among psychopaths who have had a falling out with each other. Resuscitate the idea of a military for defense. By all means, strike back at anyone who strikes us or credibly — that's C-R-E-D-I-B-L-Y — threatens to. But quit putting our own citizens (that word again) in danger of life or limb in service to an ideology.

2. Get the country out of the rescue mission business, at least as far as it consists of taking in refugees and immigrants from everywhere (i.e., about 75 percent of the world) where folks are dissatisfied with the status of their quo. Let them have a goddamn revolution instead of buying a plane ticket into our soft-hearted welfare system.

3. Build a fence and a 50-foot free-fire zone on our side of the border. Stop the anchor baby racket once and for all.

Photobucket

4. Make "program" (as in government p-----m) an unspeakable word. No more tax money to support p-----ms for inner city ping-pong recreation centers, remedial hairdressing, target shooting classes for the blind, signing interpreters for mime shows and orchestra concerts, enriched classes in earthworm studies for grade schoolers, No Teachers Union Left Behind, toenail fungus awareness outreach, parenting courses for at-risk pre-teens, video game rooms in public libraries, santeria-based speech therapy, mentoring for geriatric middle school dropouts. Spend tax money, if anyone has any remaining lolly to tax, on infrastructure projects, nuclear power plants, birth control for the poor, death-ray guns to arm border guards, and books to replace every school computer by 2012.

5. Abolish the Federal Reserve System, which has become a money counterfeiting operation. Back every dollar bill with a dollar's worth of gold. If the government can't afford to buy any more gold, let it stop printing dollars until it can. Quit inflating our way out of government debt.

Let the games end.
Photobucket

14 comments:

leadpb said...

Once again, Rick, it's as though we share the same brain. My mind waffles between "How can I get this message to my representatives" and laughing my ass off. If the poor bastards in the "developing world" need a revolution then so do we. For many years I have believed, as a general sensibility, that the worst thing Tricky DIck did was take us off the gold standard. My financial worth has to be tied to real collateral to function in the world of borrowing. Why shouldn't the big boys and Uncle Sam be on the same leash?

Yes, abolish the Federal Reserve. For starters.

Rick Darby said...

leadpb,

I hope you read the article from Seeking Alpha that I linked to. Long as it is, it's actually a skillful compression of the economic loony bin this country, including both individuals and their government, has voluntarily committed itself into.

Sebastian said...

I like your suggestions, especially replacing school computers with books. Of course, the opposite will happen - in every way. I know thirty-five year old Ive League grads who play - literally, I'm not exaggerating - upwards of 40 hours of computer games a week. These people are married and have high-end jobs. With a populace in such stupor, especially the traditionally most active member of a household, the government and NGOs can do ANYTHING they want, let in ANY number of immigrants, invade ANY nation, fabricate ANY phony crisis (Georgia), and the only reaction will remain: how does this affect my online character's capacity to get more power pellets so I can kill more monsters. - We are a nation of man-children and get the society we deserve.

Rick Darby said...

sebastian,

Forty hours of computer games a week? An average of over five hours a day? That's scary!

We all need hobbies and recreation, but if these are people who have full-time jobs, then they must have no time to ever read a book. Not, I suppose, that they'd want to.

I know plenty of people who don't play computer games, but now that I think of it, they are all of the Baby Boom generation or older. Twenty- and thirty-somethings seem to have settled for perpetual adolescence. Someone -- Diana West? -- has written a book on the widespread refusal to grow up.

If the predictions in the Seeking Alpha article are anything like correct, a lot of people are in for shock treatment.

Sebastian said...

Yes, three to four hours each night and seven to ten on weekends. Granted, these are not the most passionate, happily married, satisfied people. But it is strange nonetheless because they can function in the real world just fine. And that, ultimately, is what worries me: the "skills" needed to be a professional nowdays do not include the humane arts of conversation or sublety (now known as inter-personal skills). These guys have good portfolios, pick stocks, have their finances in order - and yet in every other way they would appear as over-grown to my mother or father. What I'm trying to describe is difficult to grasp: it's their success that baffles me and tells me what kind of society we have created. I have a copy of West's book and will get to it later his month.

Enjoy your blog!

leadpb said...

Well, once again I've made some careless error and wiped out my would-be reply. Click and "poof", gone. Doubtless we've lost some brilliant insight that would have altered global consciousness.

Actually just wanted to say thanks for pointing out that graph-encrusted article. The writing is quite friendly for readers (like me) with no real grasp of economics. Not too heavy-handed, either. He seems to be saying that we need to recognize natural cycles and let them play out without undue interference but I don't think most citizens expect the gummint to stand by while market dynamics take away their dreams. Enter the politicians-- and witness any number of the comments following that piece.

Why can't we have a loud and public understanding that private citizens, corporate and government all have responsibilities to make the system work properly, at least on average? The first group is the one that cannot dodge the bullets so you'd think they would be the most attentive, but no...

Or perhaps that is the basis of the unique energy that perpetually revitalizes the American experiment: faith that we can build what we want, and equal faith that we can fix whatever goes wrong?

zazie said...

I totally agree with your suggestions, drastic as they are !
I particularly liked the idea of a "goddamn revolution"...The French used to be good at starting that sort of things ; I often wish they remembered it ; might be a bloody affair of course if the intellectual dwarfs who "lead" the world were not brought to change their behaviour by the mere threat of a major upheaval; some will say that such an event is just what they wish ? Maybe, but then they should remember how dangerous it is to play with matches.

zazie said...

That is me again ! Sorry! I have forgotten to ask for the meaning of "santeria" ; can you spare a minute to tell me ?

yih said...

Ah yes Santaria, a bizzare blend of Catholisim and African Voodoo. Primarily practiced by Haitians.
They pray to the Saints AND sacrifice various animals. I wish I was kidding, but I'm not.

Rick Darby said...

yih,

thanks for the explanation.

zazie,

I've been watching a French TV cop show, Fabio Montale, starring an old but still handsome Alain Delon. Set in Marseille.

Of course, the bad guys are among les flics, the good guys and girls are Arabs. I see political correctness has infiltrated your TV just like it has ours.

Time for another revolution, although I hope without recourse to the guillotine this time. Allons, enfants de la Patrie!

David said...

Sebastian..."the "skills" needed to be a professional nowdays do not include the humane arts of conversation or sublety (now known as inter-personal skills)"...what kind of profession are these people in? I can't think of too many professional jobs that don't involve interpersonal skills to at least some important degre--maybe stock/bond traders, certain kinds of writers, and surgeons, but what else?

Rick Darby said...

David,

What kind of writers? Blog writers?

David said...

I'm thinking writers who don't have to interview people, or work in groups, could maybe get away without the "humane arts of conversation"...possibly some novelists could fall in this category, though I'd think the art of conversation would be useful even for them.

Howard J. Harrison said...

It is no mean feat to make a fellow laugh out loud over the Internet.

Spend tax money, if anyone has any remaining lolly to tax, on infrastructure projects, nuclear power plants, birth control for the poor, death-ray guns to arm border guards, and books to replace every school computer by 2012.

That did it. Books to replace every school computer! Exactly right.

Howard