[R-G] [BillTottenWeblog] Legitimacy Dwindles

[Bill Totten]

Clusterfuck Nation

by Jim Kunstler

Comment on current events by the author of
The Long Emergency (2005)

www.kunstler.com (December 22 2008)


Zounds! Public sentiment toward the accelerating economic fiasco has
shifted, seemingly overnight, from a mood of nauseated amazement to one
of panicked grievance as the United States moves closer to an apparent
comprehensive collapse - and so ill-timed, wouldn't you know it, to
coincide with the annual rigors of Santa Claus. The tipping point seems
to be the Bernie Madoff $50 billion Ponzi scandal, which represents the
grossest failure of authority and hence legitimacy in finance to date in
as much as Mr Madoff was a former chairman of the NASDAQ, for godsake.
It's like discovering that Ben Bernanke is running a meth lab inside the
Federal Reserve. And out in the heartland, of course, there is the
spectacle of Illinois governor Rod Blagojevich trying to desperately
dodge a racketeering rap behind an implausible hairdo.

What seems to spook people now is the possibility that everybody in
charge of everything is a fraud or a crook. Legitimacy has left the
system. Not even the the legions of Obama are immune as his reliance on
Wall Street capos Robert Rubin, Tim Geithner, and Larry Summers seem
tainted by the same reckless thinking that brought on the fiasco. His
pick last week for chief of the SEC, Mary Shapiro, is already being
dissed as a shill for the Big Bank status quo. In a few days we'll
discover what kind of bonuses are being ladled out by the remaining Wall
Street banks with TARP money and a new chorus of howls will ring out.

This is very dangerous territory. In dollar terms, the numbers being
applied to the various problems are so colossal - trillions! - that the
death of our currency seems assured. And in defiance of congress's
express intentions, none of the TARP "money" has been applied to its
targeted purpose of buying up "toxic" (that is, fraudulent) securities
hidden in the vaults of banks, pension funds, and municipal portfolios.

George W Bush's personal bailout of General Motors and Chrysler is
designed solely to postpone their bankruptcy and mass job layoffs until
after the holidays. Otherwise, the $17.4 billion will probably be used
by the companies to underwrite the extensive legal work required for the
moment they must declare bankruptcy - when Mr Obama is in the White
House. Meanwhile, the President-elect has ramped up his job-creation
target overnight from two to three million, and some observers are
catching a whiff of Soviet-style economic engineering ("... we pretend
to work and they pretend to pay us ...").

The years since Jimmy Carter have produced an astoundingly flaccid
public, sunk in various addictions and distractions, but this is about
to change. The darkling mood of political protest and violent activism
that saturated my own young adult years is scudding up again on the
horizon. Mr Obama's pick for attorney general, the mild-looking Eric
Holder, may be the key figure in the early months of the new government.
If he doesn't commence some aggressive investigations and prosecutions -
beginning with Henry Paulson for insider trading when he was in charge
of Goldman Sachs and shorting his own company's mortgage-backed
securities - then the whole Obama enterprise could fall under suspicion
of illegitimacy. The bums who ran the US banking sector into a ditch
have to account for their turpitudes. They can't be allowed to hide
under a TARP.

Unfortunately, the legal system, and probably the legislative system,
will be so buried in procedural bullshit from the unwind of countless
enterprises and institutions, and the sorting out of the remnants, that
it remains to be seen whether this generation of people-in-charge can
even embark on a fresh start of anything connected to real everyday life
in America. All this is starting to alarm the tattered residue of the
middle classes, and from here it's a very short path to them being
really pissed off.

When legitimacy erodes, anything goes. Nothing is respected including
rules and personalities. The center doesn't hold and the new vacuum
there is a tumultuous place. The same crisis of authority and legitimacy
is spreading from nation to nation now. Soon, China will contend with a
discontented army of the unemployed. Greece has been in an uproar for
two weeks. Belgium's government just collapsed. Trade barriers are going
up. Exports are falling away. The world's energy markets are not immune
to these disorders. I would expect problems with the currently seamless
supply lines that bring America two-thirds of the oil we use. Even a
mild disruption of oil supplies could attach an anvil to the ankle of an
economy already falling off a cliff.

Right now, the overwhelming sentiment is to get this country back to
where we were, say, ten years ago, when everything was humming nicely:
Clinton nostalgia. We're definitely not gong back there, though. It's an
idle wish. And any set of policies designed to lead in that direction
will prove very disappointing. Our destination is a land of much
smaller-scaled local economies. We could retain our federal ties if the
federal government can scale back appropriately from the bloated,
feckless enterprise it has become. Otherwise, it might only get in the
way and make matters worse, and the public in one region or another of
North America might reach a decision that they are better off without
it. That would be what's called a revolution.

_____

My new novel of the post-oil future, World Made By Hand, is available at
all booksellers.

http://jameshowardkunstler.typepad.com/clusterfuck_nation/2008/12/legitimacy-dwindles.html


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