Two great crashes, one surviving America

By Ben Tanosborn

ccun.org, September 29, 2008

 
First, it was the foreign policy crash of 2001.  Yes, that much-milked by Bush 9/11 which instead of serving as wake up call to review and remedy America’s deplorable policies towards the peoples of the Middle East, only provided the Bush administration with a presumed casus belli as well as a raison-d’ètre for both the neocon empire-building and the economic sacking of the nation by an unscrupulous elite.  Now, we all know the cost and results of replacing a “call to reason” with a “call to arms.”
 
And now, as if a foreign policy crash hadn’t been enough seven years ago, and as if trying to mend relations with much of the world weren’t a formidable task, here comes the nuclear detonation that precedes America’s economic crash; what may turn out to be the mother of all crashes, but one still to reach ground zero.  O, we’ll survive the impact here in America, but other than the elite, and a small affluentocracy, the rest of us, probably 85 to 90 percent of the population, will de facto help redefine this nation as the United Slaves of America.   
 
Give me Capitalism, or give me Death!  That seems to be the droning chant in America; one that long ago replaced what Patrick Henry is attributed to have said, as liberty’s great luster quickly dulled and became money-matte as greed and gluttony are allowed to roam free, without appropriate restraints.  And sure enough, as our capitalism has become more expropriatory, greedy, cruel and predatory, we have been brainwashed to feel we have no choice but to learn to live with it. It’s our country, our way of life… and God’s will being done here on earth.  Americans have rationalized the suppression of two capital sins, insisting that the number ought to be five, not seven.  After all, isn’t greed really the basis for capitalism, and consumerism (gluttony) the way we measure well-being and success in today’s society?
 
Quickly, very quickly, it’s becoming vividly clear that our much-touted American Dream is metamorphosing into an economic nightmare, one taking place right before our eyes.  Another gilded epoch in America is quickly coming to past; this time, however, its exit appears to be of the farewell-forever kind, as our nation no longer looms so vast and overpowering, economically, before the rest of the world.   
 
A week ago, as Black Monday in Wall Street helped turn on the lights on Main Street, there was a hint of mobilization by the mainstream media to do journalistic speculation, for their efforts did appear hapless on investigation, as they started reporting that maybe the nation’s economic fundamentals weren’t as sound as they had been reporting all along… courtesy, of course, of the White House (and Fed) propaganda machine.
 
Then, after a week of turmoil and the appearance of a White Knight or, should we say, a White Trojan Horse, the US as the guarantor of last resort, the market ended the week just where it had started.  And during the weekend, the polluted minds of a corrupt and incapable Congress, the “brilliant” Bush advisory cadre and an incredible Fed that has really known the facts that would bring the nation to this chaos for years, got together to construct a bailout package, or program, that they project will add up to $700 billion.  And, with zero power that we citizens have in this republic of ours, where democracy is a cruel joke, the citizenry, many somewhat remorseful for their contribution to greed and gluttony, will bite their lips and take it in stride.  Except for one thing… this action will solve nothing, only provide a temporary lifeline for domestic as well as foreign banks that may have been affected by the greed-induced mortgage crisis; and that eventually will help cronies acquire additional wealth as the disposition of real estate assets takes place.  But these folks, who dedicated “their Sunday” to the welfare of the nation, and an orderly solution to our economic ills, are missing the point; they still don’t get it!
 
We seem to micro-look at the situation and never grasp the problem in its entirety.  First, it was just mismanaged sub-prime lending, and then the escalation went on until all major financial institutions became houses of ill-repute.  But no $700 billion is going to save these institutions, nor our entire economic system; not when we may have somewhere between $350 and $500 trillion in structured financial paper (derivatives) just roaming in this US, most of it in the over the counter markets.  An incredible mess!
 
Back in 1999, Alan Greenspan, addressing the Futures Industry Association, stated: “As we approach the twenty-first century, both banks and non-banks will need to continually reassess whether their risk management practices have kept pace with their own evolving activities and with changes in financial market dynamics and readjust accordingly.  Should they succeed I am quite confident that market participants will continue to increase their reliance on derivatives to unbundled risks and thereby enhance the process of wealth creation.”
 
Well, Mr. Greenspan, did it occur to you that self-regulation that directly or indirectly you (the Fed) promoted, the do-as-you-please risk management practices, would become pure hoax and that the derivative market would grow more than ten-fold?  The process of wealth creation was enhanced, all right… but only for a thieving few.  What a fraud you’ve been, sir!
 
And now, as our economy is at an ICU, attached for dear life to a few tubes, we have a staff of quacks coming up with a reviving prognosis; the same staff, let me remind you, instrumental in creating this bacterium with an unregulated nucleus: an administration bent on redistributing wealth to the affluent; a Congress in the hands of lobbyists; and a Fed operating at the White House beck and call.
 
Our economic-political predators of the Republican-biped species have succeeded in taking down regulations, or not permitting the creation of necessary ones – to bring fairness and order to the marketplace – so as to bestow wealth on a few, part of the “privatization” dogma of conservatism.  Now, as the house of cards is collapsing, there seems to be a bipartisan cry in Washington that favors “socialization” of all costs that might be incurred.
 
If Japan’s economic crisis of 1989-1992, one with repercussions lingering to date, is a close model to the economic fiasco now in the US, we can expect the Dow 500 going down to the 6,500 level within a year or so, and remain there for the next decade.  As for Real Estate folks, their flipping will not be of houses, but hamburgers. 
 
God help us all! We have had two crashes within one decade: in foreign policy and in the economy.  We, small-case demos, have become the United Slaves of America!
 
Ben Tanosborn
www.tanosborn.com       

ben@tanosborn.com

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