[R-G] [BillTottenWeblog] A Snake Eating Its Own Tail

[Bill Totten]

Clusterfuck Nation 

by James Howard Kunstler

Comment on current events by the author of
The Long Emergency (2005)
 
www.kunstler.com (June 22 2009)

    
I'd like to know what Barack Obama thinks he's doing with the fiasco we
call the US economy.  He can't pump it back into the credit-fueled freak
show it used to be, of course, but he could steer it in a practical new
direction.  Even people who have lost a lot, and stand to lose more, can
be motivated to behave more self-beneficially. The president doesn't have
very long before his economic problems become really awful political
problems.

The current mass delusion that will go down in history as the "green
shoots fugue" can't possibly bring the credit freak show back because the
credit - that is, money borrowed from the American future - was swindled
away.  Something like $14 trillion worth of nominal dollars is being
sucked into a cosmic vortex never to be seen again.  It was last seen in
the spectral forms of so many collateralized debt obligations, credit
default swaps, so-called structured investment vehicles and other
now-obvious frauds.  That giant sucking sound we hear means the process is
still underway, and the "money" disappearing into yawning oblivion will
out-pace any effort orchestrated by the Federal Reserve and the US
Treasury to replace it with new "money" (or credit).  Therefore there is
no chance between heaven and hell that the pre-2008 suburban homesteading
and shopping fiesta can ever come back. The American polity is tapped out
in all sectors, personal, corporate, and public.

Notice the two words largely absent from whatever public discussion exists
around these matters - "swindle" and "fraud".  The reason they're missing
is because if they happened to enter the conversation, something would
have to be done about them, namely investigations and prosecutions. The
president is the person in the best position to set the terms of this
public discussion, and by avoiding these two words he's blowing the chance
to begin the process of correcting the tragic course we're on.

These swindles and frauds range from malfeasance at the highest levels to
indecency in the lowliest cubicles - that is, the collusion of a revolving
cast of cabinet-level officials with Wall Street executives to loot the US
Treasury, the probable criminal dereliction at the mid-level of agencies
like the Federal Reserve's oversight office and the SEC, to certain and
outright street grifting in the traffic of securities known to be
worthless at their creation. The current fiction that the public seems to
be swallowing (for the moment) is along the lines of the old "mistakes
were made" locution, which is an easy way to avoid holding individuals
responsible for misdeeds.

The competence and hence the legitimacy of the US government is on the
line here. The US economic situation is going to get a lot worse. Many
more people are going to lose incomes and chattels and will suffer, and
the moment will arrive when they will direct their anger outward.  They
need to be told two things:  that the borrowed-against future is now here,
requiring very different  behavior; and that those who received lavish
payment for looting the American future unlawfully will be subject to due
process of law. So far, nobody has even been fired, let alone officially
investigated.

Meanwhile, the nation is lumbering toward an epochal moment of truth when
the non-viability of how we get by day-to-day is exposed for all to see,
including those other nations who have been lending us colossal sums of
their hard-earned money to keep our operations afloat. This will be the
moment when the US renounces its debt - or just proves unable to continue
pretending to service it.  This moment is liable to come sometime after
the middle of this summer. It will be the moment when all the green shoots
babytalk stops and the scope of onrushing hardship becomes self-evident.
It will be the moment when all of America finds itself in something like
the aftermath of Hurricane Katrina, when the federal government proves
comically impotent and the cold reality hits that we're now all on our own.

If it comes to that, I will be sorry to see Barack Obama in the
goat-leader role formally occupied by George W Bush. I voted for Mr Obama
mainly because I thought he had the capacity to tell the public the truth
and inspire them to move forward out of childish indulgence into a more
rigorous and challenging way of life consistent with the mandates of
reality. I'm still not convinced that he'll fail at this, but time is
growing awfully short.

The dreadful moment may arrive with the functional bankruptcy of
California, which is on-schedule, as it happens, for July.  Governor
Schwarzenegger, who really seems to have tried introducing fiscal reality
out there, and just plain failed, will surely come to the White House
begging for a bail-out.  It would be hard for President Obama to turn him
down, but then forty-nine other governors will line up behind Arnold and
everybody in the world will see what a farce our governance has turned
into: a snake eating its own tail.

_____

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

http://kunstler.com/blog/2009/06/a-snake-eating-its-own-tail.html


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