Banks Eat Earth.
The carefully gifted Simon Johnson opines that Jamie Dimon and other Global Geniuses are conspiring to reorganize the banks too big to fail so that each of the behemoths is out of reach of the Volcker Rules and anything else that wears a badge. A macropractical way to accomplish Mr. Johnson's scenario is for Citi and JP Morgan Chase to merge with a Chinese bank, and then two more of them to pick up a partner in Brazil or India. A more modest ploy would be to form a coalition with a German bank. In any event, no more national banks. Globalization is the thing this year (decade). It is fresh thinking that the global credit catastrophe of 2008 would form the basis for a transformation of all finances into a stateless, faceless, ruthless cash machine. The Banks Too Big to Fail borrow at 0% from the Treasury du Jour and then lend at any rate they can manage -- like schools of Moby Dicks cruising the oceans for advantage and profit. What is the downside? Spoke Michael Vlahos, Huffington Post, re the fresh turmoil in the American Empire -- that the American Empire no longer commands the respect and loyalty of the American clients. Now there is a surprise in the wind. Banks Bigger than States. The Big Bankers look to be thinking post-sovereignty. Could this be the end of the Westphalian System of States? Is the 22nd Century the Age of the Credit Proconsuls? Are we to return to the dream that was Rome? "Two hundred years ago, the Gauls were our enemies," says Marcus Aurelius ("The Fall of the Roman Empire," film, 1964) "Now, we greet them as friends... Rome, Rome everywhere, a family of equal nations. That is what lies ahead..." "And when I say Rome, I mean the world." It would appear that the Romans are back -- with ATMs and CDOs. Greece, Spain, Portugal, Ireland, Italy -- all under the boot of the Banks Too Big to Fail. Soon, California, then the Bank of England? -- then, the US Treasury? Has Larry Summers signed on with the Credit Proconsuls? POTUS?
We do not have an economic crisis. We have a crisis in leadership. The ‘bad’ economy is merely a symptom of the crisis in leadership world-wide. The economy is not fragile. It is not failing. It is telling us precisely about the state the world finds itself in.
If you use a thermometer to check your child’s temperature and find he has a fever, a reasonable response should not be to blame the thermometer; to pack it in ice or throw it down in a rage. Yet this is exactly what we’re doing. The economy is merely a metric - a tool - a device to measure the relative health of a nation’s overall policies. A tool can never exceed its function. As policy is always contingent on mercurial political demands, the economy can be said to reflect the soundness of political realities as well.
In an effort to build (false) constituencies, politicians have taken the value out of work. They’ve taken winning out of the game. They’ve taken the truth out of history. They’re taking the killing out of war. They’re taking the people out of governance. In doing all that, they’ve taken hope out of the future. What they’re attempting here amounts to no less than a man-made contingency operation; attempting to change the world into what it has never been before – into what it can never be. It’s no wonder alarm bells are going off everywhere you look.
If it were merely theft, it might be a blessing. The thief is caught and punished. The victim either writes off his loss and begins again, or he is in some way compensated. Either way, there is closure. What we’re witnessing at the G8 summit in Toronto is not theft. It is trying to change the way things actually work; it is trying to upend the laws of gravity. It is going against nature without the temperance of conscience, without an understanding of trespass onto the sacred ground of reality.
You don’t go about building a machine in which every module is wholly dependent on every other. You build it so that failing modules can be easily swapped out. You don’t build an oil tanker (or submarine) without breaking it up in to compartments. If one should be breached, it can be sealed off and the rest of the ship survives. “Too big to fail” spells disaster and worse. In fact, if “too big to fail” should become the norm, we will no longer be able to tell what is disaster and what is not. There will no longer be anything to compare. Every traditional standard loses its meaning. What is is. No further argument is possible. This, plain and simple, is the definition of tyranny.
The reason America’s economic metrics are bad is not because of some vague notion of the failure as relates some equally vague academic construct. (“You don’t need a weatherman to know which way the wind blows.”) It is a failure that originates and is maintained by the people themselves. In our set-up it is the result of people rebelling against a self-serving, wrong-headed, oppressive, ruling class. The people themselves produce all the metrics needed. Governments ultimately serve at the will of the people. Without their acquiescence, government is illegitimate. The metrics tell us that this has now become the case.
http://peterkoelliker.blogspot.com/
Unfortunately, the Roman Empire was not too big to fail. It split in two and Byzantium continued for another 1000 years. The Dark Ages followed the fall of the western empire. So is it 1979 all over again or 451 AD?
The year is 1939. It will always be 1939. We must expend any amount of blood and treasure to destroy the latest Hitler, and the one who comes after him, and the one after that. Didn't you know?
We'd probably still be in the Great Depression if it weren't for WW II.
Your comment reminds me of a dinner invitation I received last year, and of the conversation that ensued after the dishes had been cleared away.
Not only was the genial host a senior research physicist who had helped to create the Active Denial System—the microwave-based “pain ray”—now being employed against the wretched Pashtun goatherds of Afghanistan, but the other guests were also impressive: a ballet dancer, an intelligence analyst, a cancer researcher, a literature professor, and so on. Aware that my girlfriend and I were there only because of our friendship with the host’s son and daughter-in-law, and that my sole claim to fame was my exceedingly modest success as a freelance scribbler, I did something uncharacteristic and kept my opinions to myself. Instead I contributed to the conversation mostly by cracking the occasional joke and asking questions of my far more accomplished dinner companions.
Over wine, however, the subject of our failing economy came up, and I ventured the suggestion that our high levels of military spending—45% of the world’s total--had contributed to this country’s current financial difficulties. The physicist smiled and told me that that seemed unlikely, since the Second World War had pulled us out of the Depression (thereby proving that he had been a diligent note-taker in high school history class).
I then said, “So, if I understand you correctly, what America most needs is a thermonuclear war. After the smoke clears and the radiation drops to acceptable levels, the survivors will all have to go down to Home Depot and buy new stuff, thereby stimulating the economy.”
“Young man,” he said, “you have a very colorful way of expressing yourself.” Then he changed the subject.
Lou, don't you remember Bastiat's Parable of the Broken Window? The destruction inflicted on Europe and Asia by World War Two was an enormous setback to civilization not only demographically and morally but also economically. The United States emerged from that conflict so prosperous only because its lucky citizens possessed fifty percent of the globe's surviving industrial capacity, an advantage great enough that even Boobus Americanus needed a couple of generations to piss it all away on schemes of welfare and empire.
On the other hand, if you were to say that the Depression helped to create the Second World War, then I wouldn’t disagree with you at all.
The above was a reply to Lou.
Just for the hell of it, I Googled "Samuel Bronston," the producer of "Fall of the Roman Empire," and found to my amusement that he was Leon Trotsky's nephew. Ah, another piece of trivia to bore my friends with.
The G20 continues to be a source of amusement. The markets are all excited today about the implications of the G20's vaporware commitment to cut their deficits in half by 2013. If there's one lesson inconvenient economic developments, including AGW and cap-and-trade, teach us, it's that these EUro-bozos never run out of excuses to waive the limits they ostentatiously place on themselves and future generations. Typically, nobody consulted their electorates to learn the taste for such drastic cuts in services, which I suspect is less than zero. I can hear the whiners now: O The Humanity! Save the Children! What about the Elders and the Homeless! Maintenance of Spending Levels on Individuals is a Human Right Guranteed by Lisbon!
I'm buying soda and popcorn for this spectacle of austerity.
Kenneth,
You responded to a non-teleogical observation of mine with a teleogical analysis.
I didn't say I thought WW II was a good thing, or that I would like a new war now to get us out of our current malaise, or even that wars in general lift nations out of depressions. If you read any of that into my statement, it was as a result of baggage from all the history we both have read, some good, some bad.
All I said was that given the endless dithering FDR did to get us out of the Great Depression, to the point where it looks very much like a Random Walk from a policy standpoint, one can notice a marked reduction in unemployment when the war machine began cranking in the U.S. That could even be a collateral effect: the economy got better precisely because FDR had to stop tinkering with it in order to start tinkering with Europe.
I'll leave the cause and effect for the wise and learned among us. I'm simply talking unemployment rates from 1932-1939 vis a vis 1940 +.
If it makes those lazy-assed Germans suffer, it must be a good thing.
DURING THE VIETNAM WAR, IT WAS SUGGESTED THAT WE WERE ON A WAR ECONOMY.
It was said that Johnson wanted the war in order to help the economy. Of course, the cost of the war killed his domestic agenda.
"the cost of the war killed his domestic agenda."
Not entirely. He left us with the Budget-EatingZombie Democgraphic Time Bomb, aka, Medicare and medicaid. Me, I think that is quite enough for one Utopian prez who didn't win election on his own merits.
CD -
I think you'd agree that we're lucky Obama isn't even close to being the politician or having the experience that LBJ had. I remember, perhaps incorrectly, that in his WH tapes Johnson, himself, blames the cost of the war for ruining his domestic agenda. Certainly, the war ended his political career. He could've run in '68, but stepped down.
Johnson won 61.1% of the national popular vote in '64, which is the highest popular-vote percentage won by a U.S.presidential candidate since 1820. I'll grant you that this extremely high percentage is due to Kennedy's assassination. Sorry to say, the country also wasn't ready for Goldwater.
However, LBJ must've had some merits: He was a Representative from Texas, from 1937–1949, a United States Senator from 1949–1961, including six years as United States Senate Majority Leader, two as Senate Minority Leader and two as Senate Majority Whip.
Looking back, I see that the idea of a 'War Economy' was an attack on the Vietnam War, itself, that it seemed the whole country had bought into. I don't know no whether or not it's true. But there's certainly no booming war economy today.