We can't tax or spend our way out of this mess. The bad debt must be defaulted, and this will mean bankruptcies among both people and companies (including banks) - lots of them. This is inevitable. Market-TickerDavid Seaton's News Links
“I have abandoned free-market principles to save the free- market system” George W. Bush
It is hard to avoid the conclusion that the U.S. and China are becoming two countries, one system. How so? Easy, in the wake of our massive bank bailout, one can now look at China and America and say: “Well, China has a big-state-owned banking sector, next to a private one, and America now has a big state-owned banking sector next to a private one. China has big state-owned industries, alongside private ones, and once Washington bails out Detroit, America will have a big state-owned industry next to private ones.” Thomas Friedman
Masters of the craft often insist that it is essential to write every day if you are going to build any writing muscles, there seem to be neural paths that need to be blazed between brain and hand in order to write and the only way to blaze and nurture them is by steadily putting words onto a white space. My brief experience tells me that this is true.
I came to writing late: analyzing world affairs meant having to write on a daily basis and having to write turned into loving to write and that helps me to write every day: a beneficent circle.
The problem in facing the white space is usually where to begin, but world news has always provided me with a wide variety of themes: every morning there was some new event to start the flow of words and ideas moving.
The last few weeks have been heavy going though.
Bush to Blago to Madoff is not the kind of triple play to have the fans on their feet, hoarse from cheering. A steady diet of writing about nothing but criminal stupidity and decadence on a massive scale is finally as appetizing as chugging a barium shake.
However the quotes from Bush and Friedman that top this post give me a glimmer of hope that certain veins of mineable mineral may lie hidden gleaming within our depression-bound dung heap.
It seems sure now that the fall of the Soviet Union and the end of the ideological struggle against its real-existing socialism, rather than leading to the kingdom of heaven of market capitalism has, in fact, led to some sort of surprising synthesis, which we might tentatively call "don't-look-now-socialism".
The bottom line is that the political system of the United States will not tolerate those classic economic forces, the very rock upon which they have built their church; it will not permit the forces that Reagan called "the magic of markets", to wreak their "creative destruction" on the lives and futures of America's children, aged pensioners, middle class home owners, students, farmers, autoworkers and the assorted consumers of junk food and Chinese Gewgaws.
The system won't tolerate the market cleaning up its own mess because the system is afraid that the aforementioned victims might just turn around and burn the mother down.
Off the top of my head I would say that the consumer society, whose cornucopia of abundance buried real-existing socialism, succeeded in becoming the absolute motor of the US economy by drumming into people's consciousness that they are unique and special individuals whose wants and desires must be discovered, cultivated and satisfied.
Try telling a spoiled child that he or she has just been drafted into the world's "reserve army of labor", then stand back and watch them trash the nursery.
For the American economy to look them in the eye and tell them they are just so much dirt is not a message that a consumer with a "unique life style" can easily digest.
So here we are in the closing days of 2008, watching Adam Smith, Joseph Schumpeter, Karl Popper and Milton Friedman lie moldering on the ash heap of history, while Karl Marx daintily brushes the ashes off his old suit and goes over his notes. DS