The Banks Do Not Have A Bottom.
With no end in sight to the financial crisis worldwide, with Citibank and Bank of America both zombies, with the markets selling off more than 15% since the President's prime time press conference of February 10, with the EU in a panic over unstable banks in the west and lifeless economies in the east, with no recognizable end to the decline in housing prices here or in Europe, it is time to leap into the mood of the nation in March 1933 at the depth of the Great Depression. On Tuesday March 7, King Kong, the greatest leading man of all times, opened at Radio City Music Hall and Rialto in New York and a star was born. Fay Rae, playing a good girl down on her luck for a meal, so accepting the lunatic proposal from a movie producer to set sail for Skull Island, was entirely believable and sympathetic to the pinched, desperate audiences of 10,000 at a sitting. Less credible to the audiences that month was the idea of a benevolent or competent political leadership. Hollywood recognized the opportunity, and provided a fantasy at the close of the month that fed the national longing. A swift melodrama, "Gabriel Over the White House," opened on March 31 at the Capitol Theater in New York and was immediately praised by critics and audiences as "very interesting."
Archangel Gabriel and the President.
The vivid Walter Huston is President Jasper Hammond, who is a wastrel and hack until he cracks up his car and almost dies. In recovery, the Archangel Gabriel appears to him to inspire him to lead the people righteously. The President springs to action, firing his quibbling, cynical Secretary of State, Arthur Byron playing Jasper Brooks, and then junking the whole back-stabbing Cabinet. The Congress moves to impeach and remove the President from office, but the President ambushes the Capital and takes dictatorial powers. An army of a million unemployed men are marching on Washington, and the Dictator/President rushes to Baltimore to confront them heroically. Gangsters kill the charismatic leader of the unemployed, and eventually turn their guns on the White House. The President's secretary, Franchot Tone, leads a counter strike against the gangsters that restores law. The President takes to the airwaves to declare a better day and that the nations who owe the United States money for war debts must pay up rather than spend billions on building armies and navies for war. The President/Dictator is successful in every endeavor but is suddenly flattened by a heart attack that kills him. His extra time on Earth since the car crash was well spent. Death calls him away.
Archangel Gabriel and President Obama.
And if the President was given thirty days, or ninety days, extra on Earth, between now and when the plot ends, would he entertain the half-measures, evasions, blame-shifting, illusions, far-fetched promises that have been the daily conversation of the administration since the prime time press conference of February 10? Would he schmooze with the master bankers (right on February 13, the President and JP Morgan boss Jamie Dimon, who just cut his dividend by 87%) and their kindred of Cain who triggered this ruin with their ruthlessness and ignorance? The markets do not have partisan opinions. Below 750 on the SPX is air. We are going to test 600 and then 450. Car crash dead ahead. The army of the employed swells and marches. Bullets at the White House. Time to call in debts from our allies and adversaries. There is either a global solution, or there is no solution. Gabriel, that is your cue.
The highest degree we can award to students (and the practitioners) of any of our accredited academic disciplines is a Ph.D. It literally means “Doctor of Philosophy”. By doing so, we acknowledge that even minutely focused expertise can never exist in a vacuum; that all knowledge is in some way connected. It is what allowed Albert Einstein to contemplate the greater implications of his own specialized research.
The ubiquitous presence of fiscally savvy talking heads on cable TV does nothing to ease our concerns. The numbers tell us that our economy is broken. But no one is able to tell us what’s behind the numbers. Nobody regards the economy as a mirror reflecting the general state of our nation. If they did, we would know that first and foremost our government is riddled with corruption; our educational system is broken; ditto, our (non-existing) energy policy; foreign policy; judicial; immigration; health care, tort system; etc. Now we come to the meat of it: Our problem is far bigger than simply taping the shards of Lady Shalott’s crack’d mirror back together.
It has become painfully obvious, that fiscal experts do not understand the connection between the economic numbers and the world around them. They do not understand the term, “value”, for instance. If they did, they would know that Government Issue paper printed on government presses has no intrinsic value in and of itself. If anything, it dilutes the value of existing currency. (How long before the Chinese catch on to what we are doing?)
In a properly functioning economic system, each person who participates has a salable skill. The ‘value’ of this skill can be enhanced by further study, practice, talent and persistence. “Value” is and has always been calculated by degrees of scarcity. The better you are at something, the more valuable your services will be to others. In the real world, this often (but not always) translates directly into the money you can expect to earn.
We are not drawn to ‘The John Batchelor Show’ by the luck of the draw. A Rod’s 10-year, $275-million contract with the Yankees is not just some random give-away to the first Tom, Dick and Harry who might have come walking down River Avenue in the Bronx. It represents a percentage of what Rodriguez can be expected to contribute to the bottom line of the organization. Both, Batchelor’s insights and A Rod’s hitting skills can be regarded as valuable commodities by the inarguable fact that such are in limited supply.
Should (then) the government step in and upset this dynamic - with usurious taxation and redistributionist policies; inexplicable regulations; censorship …what have you - and destroy the very concept of (monetary) ‘value’, the system collapses. Look at it this way, if the Yankees were to send the likes of myself and perhaps some of the people on this blog out onto the field next summer, I dare say the Yankees would soon cease to exist as a viable major league team.
*Phlegm and the Phalanx-*
Contrary to some opinions of the state of our State and the endemic properties thus, we do know what is causing the current tendencies. Our systemic is congested with massive outlays in governmental and corporate bloat.
Nine out of every ten members of the Phalanx are positioned at the heels of the line in front of them, and while trying to hold the line, are pushing at the backs of the the ones in front of them with all their might. When one falls then it is assumed that another will be forced to the fore in a controlled and contiguous stampede.
To attain the status of a retired warrior with pension and perpetual care, for as long or longer than an actual productive career, is worth fighting for. But, as with the concentration of masses, comes the susceptibility to contagion.
Economic Pneumonia has beset us in virtually every aspect of what makes an economy and has made drawing fresh air too laborious to continue trying. Brought to the battlefield by irresponsible Generals to the battlefield, Apathy is weakening the will to fight and leaving even the most strident listless.
As concerned as I am about our standing in the world, I cannot comprehend the commitment of almost a billion dollars of aid to an organization that we consider terrorist in thought and deed and would practice their mayhem in *our* homeland.
And the disconnected powers that be sit in bewilderment and wonder why we are discombobulated.
Apathy? You bet your bottom dollar!!
Folks seem to over-complicate this matter by trying to explain the current situation as a single crisis. It is actually two crises; 1) bank insolvency brought on by irresponsible lending and the bursting of the housing bubble and 2) declining aggregate demand brought on by consumer fear, tightening credit and declining employment.
Crisis #1 is being handled by the Fed and Treasury by pumping money into the banks to keep them solvent. Crisis #2, also known as a Keynesian paradox of thrift, is what the stimulus plan is supposed to solve.
In normal times I would find the methods described above to be abhorrent, but they are our best hope of minimizing the pain and speeding economic recovery. We just need to make certain the White House and Congress cuts spending during the recovery period in order to pay down the increase in national debt.