I had a commenter, "Mayberry", on my last post tell me:
"You're not a "doomer"? You should be. The Ponzi scheme is collapsing."
The question is: WHEN?
To which I would answer: Right about NOW.
No, not exactly "now", or precisely "now", or sorta "now". The unwind is going on right now, even as we "debate".
What we SHOULD debate, what is WORTH debating... are the "unintended consequences", or in this case as the event itself is unwelcome and unintended perhaps just the plain consequences or outcomes.
(Remember that even if the financial system unwinds or contracts terribly (I think a foregone conclusion) that does not change by one single molecule the amount of the many resources these financial instruments were merely MARKERS for. It then follows that for some there will a great parting of the ways with their "assets", while for others opportunities to move up the food chain will crop up, even if overall society becomes less wealthy.)
Warren Buffet's partner of many decades, Charlie Munger (himself the quintessential curmudgeon) has been informing anybody who would listen that "The Death of Capitalism" is at hand for America. He is probably correct, as he defines "capitalism". (To my mind we have had two versions of "capitalism" here in America... large Corporate crony socialist/fascism and small business REAL capitalism. I must confess and disclose my politics: As a Republican/Conservative/Libertarian I view large corporations as the f*&^^%ing Anti-Christ, and small business as the last noble vestige of what was once, and I really think (or hope) will be once again, America. The Left controls and is fed and nurtured by Corporate America, the Right and Libertarians are fed and nurtured by small biz. This is not to say that the Dems and Repubs are not one big, disgusting incestuous family - they are - but the Left and Right are most certainly not, and that the money trail "doth proclaim" the previous assertion. And why shouldn't it be so? It was Corporate America's ability to withhold payroll taxes that funded the sinking ship that is the U.S. Government. As I have posted a zillion times before: The Left as we knew them are dead, and so is the Right. These groups will morph, IMHO, into Fascists and Libertarians - and, Lord, do I hope the Libertarians win.)
Crony Capitalism IS failing (if this were not true, what's up with the bailouts?). Many folks are going to get killed in the crossfire that will ensue. I always look at this through the eyes of a "little guy" - best thing I can do for all involved is not be one of the victims. As "Coal Guy" recently commented: "When this is all over, the houses will still be there and the people will live in them." How very, very poignant. This certainly will be the case - but the system of money creation based on lending against these "assets" as collateral? I rather think not.
Sooooooo..... what does the economy look like in this "brave new world"? Good f*&^%ing question! If we knew with any degree of certainty, we would not have to waste a moment's breath debating it, now would we? Hence the need for contingency planning, and hence the response in the "market place" (i.e., Costco selling emergency supplies... and I am not saying that it is the right response, or the right stuff, or the right whatever... only that the market is responding and that is a good thing). This is why I do not describe myself as a "Doomer". I fully intend to study and interpret my environment, and do it better than my competitors, in order to profit for myself and my partners. If I thought it was the end of the world... why would I bother? The real answer is that I do not believe that all of this is the end of the world FOR ME AND MINE, but I do think a great many people will skirt awfully close to the bleeding edge of the end. That's what happens when government "social programs" fail because of silly promises that simply cannot be kept. Does any rational person really think we would be in the mess we are in if it weren't for the fact that too many people have become utterly and hopelessly dependent on the Government for food, shelter, clothing (otherwise known as money) and with it a military budget large enough to enforce US$ hegemony in order to FUND THOSE *&^%^&!! programs!? And why is it that so many on the Left do not see that the military budget is there to do this for YOUR PROGRAMS?! Did any of these programs end the human misery they claimed they were going to do? NAFC. They did, however, blow a new "bubble" that now must be popped. Not all "bubbles" are asset "bubbles".
16 comments:
It's always interesting to see definitions and how someone connects the dots. When you write:
The Left controls and is fed and nurtured by Corporate America, the Right and Libertarians are fed and nurtured by small biz.
I find myself a bit puzzled. Hasn't the 'Left' generally been anti corporatist and the Right and the Republicans generally pro corporatist?
So Rupert Murdoch's NewsCorp (huge corporation) and Fox News is really a leftist conspiracy? Goldman Sachs is really part of the vast left wing. Kenny Boy Lay at Enron and Uncle Dick Cheney at Halliburton are just a couple lefties?
Just wondering.
Welcome to successful propaganda! It worked.
The Corporations (the Left) benefit from having monopolies and barriers to entry that government regulation provide - small business does not.
Big Government benefits from easy Tax collecting - what is easier than impounded employee income taxes?
Wall Street is in New York City - Registered Dems out number Repubs 5 to 1 in NYC. NYC is one of the most liberal bastions in the U.S.
Dem Senator and recently Governor Corzine and Secretary of Treas for Clinton Robert Rubin both came out of Goldman, as did Henry Paulson (though he was appointed by Bush, Paulson gave more money to Democratic candidates over the years than Repubs... GO FIGURE).
Spare me the sarcasm... follow the money. I never said it was a "conspiracy". It is right there in front of your face if you want to see it.
Are ALL Corporations Leftist? Come on. Are all "anybody" "anything"? Give me a break. Washington, the Media, the Law, Finance, et al are dominated by folks in 2 states - California and Greater (yea, I know... but you get the point) New York - and one of those ain't Tennessee or Montana. The nose pickers and yokels that the Liberal elite mock don't live in these places nor travel in these circles.
BTW Anon @ 10:25:
Have you looked the Congressional delegation coming out of New York and environs? Wall Street is OWNED by the Democrats. So is Hollywood and the Media.
The Republicans got to own country music...
BIG DIFFERENCE.
Anything else you were wondering about? Let me know. Better yet, write up a full analysis - I will be more than happy to post it.
You see, bro... I don't BELIEVE anything. I tear it apart, the term of art in analysis is "scrubbing". Please, scrub your position and post it. I would love to see you support it.
Greg,
have you seen where Brazil will be importing 2 million barrels of gas from Venezuala due to a shortage of ethanol production?
Sugar prices spike followed by ethanol shortage. Not to hard to imagine the same thing happening here with corn.
I love it when you speak in generalities and then some ass clown anonymous poster (always anonymous) goes and points out that this only holds true 90% of the time. Even though bureaucrat holds the exact opposite point of view as I do, at least I respect when he presents his opinion with facts and figures and explains why he feels that way. These freaking people who go around regurgitating Keith Olberman and screaming how much they hate Bush and the neo-cons need to try using some independent thought and stop spewing the same senseless garbage they have heard somewhere over and over. But then again when you’re following the truly great political minds like Sean Penn, maybe having expectations for analytical thought is simply unrealistic.
Thank you. I do prefer facts and figures myself, but you have to do a lot of reading to collect all those facts and figures, and not everyone has the time to do all that. :)
One Ponzi scheme that seems NOT to have collapsed is the United States. Been around 230 years, and has had a Federal budget deficit almost all of those years. And yet for some reason, our little Ponzi scheme called America has yet to collapse. Not 5 years, not 10 years, not 50 years or even 100 years. 230+ years, and we're still functioning. Maybe the Ponzi thing is way overdone. :)
I'd also say that small business is way overrated. This country isn't the powerful "America" because we have thousands of nail salons, dry cleaners and Jimmy Johns. We are a great country because we have Boeing building planes and Ford building cars and Pfizer producing drugs and Intel developing computer chips. The companies of the S&P 500 produce 67% of all the goods and services in this country. Small businesses are the largest collection of whiners ever, demanding less regulation (though they cause the most trouble), fewer taxes (though they get boku deductions and credits) and more respect (yet they have all legislative bodies in their hip pocket). The only people who get rich from small businesses are the owners. Most of the workers who get robbed in this country worked for small businesses. I know of two people in particular.
Hey Bur,
You are correct that the big corporations produce a lot of things people need. In fact, some of these things can only be done by large organizations with the ability to fund multi-billion dollar projects. That is not the problem.
Please, note to yourself, that you are a liberal who defends the big corporations. I am a conservative, with libertarian tendencies who is bashing them. Go figure.
The problem is with centralization of power. These entities have disproportionate influence over government. They cause a lot of law and policy to be created that is not in the best interest of the Nation or the average American. They are self-serving at everyone else's expense. This is a centralization of power that is largely misunderstood. Concentration of all economic and political power into the hands of a few is extremely dangerous.
The reason that the only small business that are left are nail salons is that the large corporations have the resources to move all labor intensive work off shore. Only services that can't be performed at a distance remain. This tactic has pushed the large corporations' smaller competitors into bankruptcy. Thus, the big have gotten bigger. The small businessman and the laborer on this country have been screwed.
They (the corporations) through their influence on fiscal and monetary policy have hidden the fact that they have been destroying our economy. They have done this by having the government blow the biggest credit bubble in the history of the world. It has popped and the gas is escaping as we read and write here.
The appearance of prosperity was achieved by creating money through increasing debt. This creation of money from thin air replaced the real value that was no longer created by manufacturing. This new money went offshore to buy oil and cheap goods from the Far East. The dollars that piled up offshore were repatriated through the sale of Treasuries to fund our bloated Socialist government (both Republican and Democrat have aided) and MBSs to make GS, et al., the fattest pigs at the trough.
It started in the mid '70s. It is ending now. Recovery will take decades. Has this been good for the average American? Hell no! I grew up in the rust belt. By 1980, my home town looked like Detroit today. Even in the early 80s there were $5000 and $10000 houses everywhere. Now many are torn down, leaving a patchwork of old run-down houses and vacant lots. But, then again who cares about a bunch of Mill Hunkies in fly-over country. Has it been good for the corporations and the liberal elite. You bet. Fat as can be. Now that the scheme has run its course, who is getting bailed out? It isn't Joe Sixpack. As Greg says, follow the money.
Regards,
Coal Guy
Coal Guy!
That was great! Saved me a ton of work and explaining and I am going to use much of that in a future post...
One thing I want to reemphasize:
"Please, note to yourself, that you are a liberal who defends the big corporations. I am a conservative, with libertarian tendencies who is bashing them. Go figure."
Funny, I defined myself as Rep, Con, and big time Libertarian.... and I was the guy that brought up that I think large Corporations are the "Anti-Christ"... The young unmonied Left hates the Corporation for reasons they don't even understand. Guys on my side of the spectrum despise what the Corporations have done to our freedoms through policy and law via their lobbyists.
Oh, we are hipocrite's, too. We own stock and lend money in the form of Corporate bonds to the very institutions that are jacking America... and therein lies the rub...
BUT, As a small business owner, there is no question in my mind witch party or ideology is more likely to be concerned with my interests - and it ain't the Dems.
Coal guy,
Youngstown ,Ohio ( the steel city) is my old home town and their death spiral started mid seventies or so just as you pointed out, the steel went over seas. All that stands are rolling green meadows where HUGE factories once stood. Nice trick. It now only produces government checks and professional boxers. Funny though they hardly notice much in way of change good or bad these past couple of years most have accepted their fate. Shame.
peace
Greg,
If there were another game in town, I'd be playing over there. The system has been co-opted. What else is there to do?
Regards,
Coal Guy
Peace,
I'm originally from Johnstown, PA. In 1977, Bethlehem Steel closed the mill, except for one electric furnace. 17,000 jobs were lost. Just like that. They spent the next 10 years cutting the mill into pieces, melting it in the furnace and selling it. Some of it was built in the 1870s.
Sad.
Regards,
Coal Guy
Coal Guy:
I was just pointing out my own inconsistencies - we all have them. Nothing is perfect nor absolute... I have pulled the leaver for politicians that supported the death penalty in order to avoid a politician that supported abortion funding - though I support neither - because in the real world we all make compromises...
Life is imperfect and I think it is important to know when one is sleeping with the enemy, as sleep we must.
In the end, I think, or at least for myself I refuse to "play G-d" in any form that is recognizable for me... we, and certainly I, are just not that smart. It seems to me that we have plenty of these folks around, though, and i will continue to resist such people.
I thank you for your excellent comments!
Agreed!
Thanks for this excellent forum.
Regards,
Coal Guy
I accept your analysis of the financial support for Left and Right, but there is another aspect. These big comanies are now international; production in Mexico or China, financing in London, sales everywhere. And maybe even shareholders in Saudi or Shanghai!
They are 'American' only so long as its a worthwhile market; how much longer will that be true?
If America is in a long decline you may find a distinct lack of interest from these international companies in financing American politics and politicians.
Donal:
I think your point is well made.
Should be interesting...
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