Little humor for Monday!
Monday, January 31, 2011
The Earth Shifts
Those Panglossians around the USA awaiting something like an election in Egypt are going to be disappointed. What's going on in the streets of Cairo right now is an Egyptian election - minus the American-style trappings of corporate grift, scripted "debates," and polling places that make our elections so satisfying.
Many here in the dreamland of Happy Motoring and Cheez Wiz are asking themselves why President Obama is waffling about the obvious tides of "change" now lapping over the ancient Kingdom on the Nile. How can he not believe in it? Why isn't Mr. O out there in front with a bloody bandage around his head, cheerleading for the street fighters? If you lay aside the subtleties, the answer is simple: nothing beyond the status quo of recent years is good news for America.
For one thing, only people paid to flap their gums on Larry Kudlow's nightly CNBC show, and children under nine years old, believe that anything like "democracy and freedom" will arise out of a street revolt in this region of the world. Sure, the opening acts of an historic event like this bring on mass intoxication that the Shining City or the Kingdom of Heaven or some other ideal disposition of things is at hand. There may even be an intermezzo of civil factional interplay, as we saw in Iran thirty years ago, with figures like Shapour Bakhtiar, Mehdi Bazargan, and Abolhassan Banisadr revolving through the turnstile of politics. It doesn't take long for the turnstile to turn into a meat grinder, and it doesn't take much vision to see all the things that can go wrong when that happens in that part of the world.
Before I go any further, I don't want to be misunderstood by eager misunderstanders. In my view, President Mubarak has about as much chance of sticking around his presidential palace another fortnight as a bluebottle fly has of conducting the next Easter mass at the Vatican. Mubarak's resistance to that message prompts one to wonder: what is it with these old despots that they can't manage some sort of orderly timely transition - even if they handpick the successor dude.? There must be a few capable younger replacement despots in a country that large (around 80 million). Why does it always have to come to this?
For the answer to that abiding mystery I can only commend you to the works of Gabriel García Márquez. Who else really knows what winds of confusion blow through the minds of old men in realms of power? But, on the "plus side," as they say in American positive thinking circles, the old bastard did manage to keep the peace for three decades at his end of things in the world's premier political hot-spot. This is truly one of the unsung miracles of the age we're living in. Of course, with Mubarak pulled down, all bets on this would be off.
At the moment, Nobel Peace Prize winner Mohamed ElBaradei, former head of the International Atomic Energy Agency, a seemingly rational, capable fellow of unquestioned gravitas is angling to replace Mubarak. By declaring his intentions, ElBaradei has already crossed some kind of line in the sand that, under less fateful circumstances, would get his ass tossed in a crocodile pit faster than you could recite an incantation from the Scroll of Thoth. But these are extraordinary moments.
More troubling is ElBaradei's flirtation with the Muslim Brotherhood, a venerable mostly underground opposition with a not altogether trustworthy agenda where the USA, and the OECD West generally, are concerned. Whatever the MB represents - and I don't think even the Arab Desk nerds at the State Department are even quite sure - there's a fair chance that it includes mischief like promoting a Sharia state, inciting trouble through Hamas, supporting uprisings in other key Muslim nations, and egging on new, unwelcome disorders in a region that the stability of the world hinges on these days.
The key to all that is oil, of course, and mainly the oil of Saudi Arabia. King Abdullah there is at least 86 years old and in poor health. Crown Prince Sultan, his successor, isn't much younger. If ever a country was ripe for a political flipping it is this shaky kingdom. Everyone from the White House to Foggy Bottom to Langley, Virginia, is probably messing his/her pants this week wondering how much longer the lid can be kept on that joint.
To return to an earlier theme, what should amaze us now in the unraveling of this region is how remarkable and long the recent era of stability lasted. Meaning, most of all, how reliable those tanker shipments of oil have been moving through the Straits of Hormuz and the Suez Canal to their destinations in the lands of the Crusaders (and their younger kin in the New World). To put it pretty starkly, the so-called developed world can't keep its act together more than a week without that steady mainline of Arabian oil, even though it doesn't represent most of the oil traded in the world. The margins are too thin. There's no wiggle room, really, especially for us, in our kingdom of freeways. We lose ten percent of our oil supply and that's all she wrote for business as usual around here. I'll put it even more starkly: we can't afford to let this shit get out of hand for a New York minute.
But it's not really up to us, no matter how many times Hillary Clinton says "uh," through her tightly pursed lips. And Barack Obama is kicking back like everybody else watching things beyond our control spin out on cable TV. Remember something else: these uproars in the Middle East are only the first stirrings of political reaction to a scarcity of key world resources, especially grain crops, which have never been in such short supply in modern times. And the part of this problem that isn't due to sheer population overshoot is almost certainly a result of climate change - which many idiots in the US congress refuse to acknowledge out of sheer obdurate stupidity.
A word or two about last week's State of the Union speech. The platitudes were nearly too painful to bear: techno-magic and a zillion engineering PhDs will keeps us at the zenith of historic wonderfulness. Has anyone been to Youngstown, Ohio, recently? We're so full of shit about ourselves, our true condition, and our prospects, that you can see it through our eyeballs. I did, however, mutter a prayer of thanks that Mr. Obama did not act out the mortifying ritual (first established by R. Reagan) of introducing the various role models, heroes, and exemplars installed up in the gallery. We have enough award shows in this country, and it's the horror-inducing season for it - just as the world is flying apart at the seams.
Monday, January 24, 2011
State of Suspension
You kind of wonder here in the flash-frozen northeast if, a few days from now, scores of dead bodies will be found in unheated trailers across the county. The Weather Channel said 20-below-zero this morning in upstate New York. I know there are people so desperately poor out there because a couple of weeks ago I overheard a supermarket worker say she couldn't afford to buy propane. And she had a job!
I haven't left the house myself for two days and a Snow Leopard installation put my iMac into a hang-up deepfreeze all its own (I'm on the MacBook now). But enough about me.... I wonder if Barack Obama himself is sleeping in a casket in the White House basement these days, waiting for fairer conditions before facing a nation spinning into the dark unknown. Of course he has to put in the annual appearance before a mostly hostile joint session of congress later in the week. I can't imagine that coming off as anything but an orgy of self-congratulation for our national wonderfulness - especially on the occasion of a multiple slaying - and cheerleading for the marvelous restoration of the set of revolving rackets we call "the economy." I pray to all the Gods that assorted heroes du jour will not be planted in the balcony of the House Chamber and subject to the Reagan-style show-and-tell, which the Gipper's managers so astutely used as a sly distraction from straight talk about where we are at as a polity.
The bloodbath in Tucson completely obscured a momentous development in Mr. Obama's executive sphere, when he brought on JP Morgan factotum William Daley as White House Chief of Staff, for Gawdsake, and nobody in the news media so much as coughed into his (or her) sleeve. He also hired recent Goldman Sachs errand boy Gene Sperling to direct the National Economic Council. At Goldman, Sperling was charged with running self-esteem workshops for Third Worlders - an obvious public relations ploy. You wonder now whether he'll be carting American "99-ers" off to the Aspen Institute for weekends of buffet line cruising and "ideating" - to use a popular new vapidity from the lexicon of Big Business.
Last Thursday, Mr. Obama actually flew up to my home territory to visit the headquarters of General Electric and sign on its CEO, Jeffrey Immelt, as yet another White House special economic advisor. Notice, by the way, that GE was the recipient of untold billions of TARP pixie dust. I wonder if the president got a good look at GE's home base, Schenectady, New York, a once-vibrant industrial dynamo now so sclerotic that it makes the former soviet Magnetogorsks and Traktorgrads sound like El Dorados.
Meanwhile, GE only incidentally makes electrical things anymore. Mostly, like everything else in America, they became a financial company, looking for ways to make money off of money, and mostly losing heaps of money in the process - for the excellent reason that it's really not possible to get something for nothing in this universe, though we wish it were not so. Likewise, GE's vaunted new battery initiative, which is aimed mainly at the idea that we can run the whole US vehicle fleet on electricity (mostly powered by coal, you understand, the dirtiest of all fossil fuels) is another quixotic project based on something-for-nothing wishes.
The weird part is that a president can journey to a place like Schenectady - once a fine, small-scaled walkable city with first-rate public transit on a major waterway (the Mohawk River / Erie Canal system) plus the New York Central Railroad main line - and never notice that the future of this society waits in realms and actions other than the tragic habit of Happy Motoring. He certainly didn't use the occasion to make a single remark on that theme, which is probably the only true alt.energy scenario that might prevent America from sliding into a dark age.
The appointments of Daley, Sperling, and Immelt show not just the total "capture" of Obama's government by sociopathic corporate interests (which, after all, have the sole mission of rewarding their shareholders, boards of directors, and executives), but it also shows the astounding poverty of imagination at the center of American political life. This is a fatal vacuum that invites something like revolution, because the only thing this vacuum seeks to do is suck things outside of itself into its own darkness.
Revolutions come in many styles. This one is shaping up to look rather red-and-slippery, because the grift has really amounted to the wholesale theft of a generation's future. There are 21-year-olds out there right now laboring under massive burdens of college loans that they were swindled into signing at a time when the parts of their brain concerned with judgment had not fully developed, and they are every bit as smart as the men running the predatory corporations today. Even after they eventually give up paying their debt-peonage tuition loans, they are going to be very pissed off at the way the older generation ran their country into the ground. Let's just hope that the mental torture inflicted on them doesn't turn them into a legion of Jared Lee Loughners.
Sunday, January 23, 2011
Saturday, January 08, 2011
Statement as of 7:41 PM CST on January 08, 2011
... Winter Storm Watch remains in effect from 3 am CST Sunday
through Sunday evening...
A Winter Storm Watch for heavy snow remains in effect from 3 am CST
Sunday through Sunday evening.
A powerful storm system currently moving into far West Texas will
continue to move east and affect North Texas late tonight. Areas
of rain and isolated thunderstorms are expected to rapidly develop
across central and south Texas late this evening as moisture
surges northward. As the storm system moves across North Texas during
the day Sunday... temperatures are expected to fall to near or just
above freezing. Rain is expected to transition to snow beginning
Sunday morning and continuing into the afternoon. This is a very
fluid situation and many factors may change the forecast. It
should be stressed that if temperatures were to be slightly
warmer... no snow would fall in and around the metroplex. At this
time... temperatures do appear to be cold enough to support snow
and 3 to 5 inches of snow may fall over the area by Sunday
afternoon. The storm system is expected to quickly move east of
the area by early Monday morning.
Portions or all of this watch could be upgraded to a Winter Storm
Warning overnight if the forecast track of the upper low and the
temperature profiles remain similar to what they are now.
A Winter Storm Watch means there is a potential for significant
snow... sleet... or ice accumulations that may impact travel.
Persons with planned travel across north and northeast Texas and
into Louisiana on Sunday should monitor the latest forecasts
closely for any changes.
Friday, January 07, 2011
Today, Secretary Geithner sent the following letter to Congress regarding the debt limit (download the signed letter here):
The Honorable Harry ReidJanuary 6, 2011
Majority Leader
United States Senate
Washington, DC 20510
Dear Mr. Leader:
I am writing in response to your request for an estimate by the Treasury Department of when the statutory debt limit will be reached, and for a description of the consequences of default by the United States.
Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs. Even a very short-term or limited default would have catastrophic economic consequences that would last for decades. Failure to increase the limit would be deeply irresponsible. For these reasons, I am requesting that Congress act to increase the limit early this year, well before the threat of default becomes imminent.
As you know, in February of 2010 Congress passed legislation to increase the debt limit to $14.29 trillion. As of this writing, the outstanding debt that is subject to the limit stands at $13.95 trillion, leaving approximately $335 billion of “headroom” beneath the current limit. Because of the inherent uncertainty associated with tax receipts and refunds during the spring tax filing season, as well as other variable factors, it is not possible at this point to predict with precision the date by which the debt limit will be reached. However, the Treasury Department now estimates that the debt limit will be reached as early as March 31, 2011, and most likely sometime between that date and May 16, 2011. This estimate is subject to change depending on the performance of the economy, government receipts, and other factors. This means it is necessary for Congress to act by the end of the first quarter of 2011.
At several points in past years, Treasury has taken exceptional actions to delay the date by which the limit was reached in order to give Congress additional time to raise the limit. These extraordinary actions include: suspending sales of State and Local Government Series (SLGS) Treasury securities[1]; suspending reinvestment of the Government Securities Investment Fund (G-Fund)[2]; suspending reinvestment of the Exchange Stabilization Fund (ESF)[3]; and determining that a “debt issuance suspension period” exists, permitting redemption of existing, and suspension of new, investments of the Civil Service Retirement and Disability Fund (CSRDF)[4]. Treasury would prefer not to have to engage again in any of these extraordinary measures. If we are forced to do so again, these measures could delay the date by which the limit is reached by several weeks. Once these steps have been taken, no remaining legal and prudent measures would be available to create additional headroom under the debt limit, and the United States would begin to default on its obligations.
As discussed in greater detail below, raising the debt limit is necessary to allow the Treasury to meet obligations of the United States that have been established, authorized, and appropriated by the Congress. It is important to emphasize that changing the debt limit does not alter or increase the obligations we have as a nation; it simply permits the Treasury to fund those obligations Congress has already established.
In fact, even if Congress were immediately to adopt the deep cuts in discretionary spending of the magnitude suggested by some Members of Congress, such as reverting to Fiscal Year 2008 spending levels, the need to increase the debt limit would be delayed by no more than two weeks. The limit would still need to be raised to make it possible for the government to avoid default and to meet the other obligations established by Congress.
The national debt is the total amount of money borrowed in order to fulfill the requirements imposed by past Congresses and under past presidencies, during periods when both Republicans and Democrats were in control of different branches of government. These are legal obligations, incurred under the laws of the United States. Responsibility for creating the debt is bipartisan, and responsibility for meeting the Nation’s obligations must be shared by both parties.
As the 112th Congress turns to this issue, I want to stress that President Obama believes strongly in the need to restore balance to our fiscal position, and he is committed to working with both parties to put the Nation on a fiscally responsible path. This will require difficult choices and a comprehensive approach to reduce the gap between our commitments and our resources. It will require that the government spend less and spend more wisely. The President has already taken important steps, including enacting the savings in the Affordable Care Act; restoring Pay-As-You-Go budgeting; and undertaking a three-year freeze on non-security discretionary spending. The President’s proposals would put us on a path to cut the deficit by more than half in the medium term, and substantially reduce the rate of growth in federal health care costs in the long term. The President looks forward to working with Members of the 112th Congress on additional measures to address our medium- and long-term fiscal challenges.
Because Congress has always acted to increase the debt limit when necessary, and because failure to do so would be harmful to the interests of every American, I am confident that Congress will act in a timely manner to increase the limit this year. However, for the benefit of Members of Congress and the public, I want to make clear, for the record, what the implications of a default would be so there can be no misunderstanding when the issue is debated in the House and Senate.
Reaching the debt limit would mean the Treasury would be prevented by law from borrowing in order to pay obligations the Nation is legally required to pay, an event that has no precedent in American history. Such a default should be understood as distinct from a temporary government shutdown resulting from failure to enact appropriations bills, which occurred in late 1995 and early 1996. Those government shutdowns, which were unwise and highly disruptive, did not have the same long-term negative impact on U.S. creditworthiness as a default would, because there was headroom available under the debt limit at that time.
I am certain you will agree that it is strongly in our national interest for Congress to act well before the debt limit is reached. However, if Congress were to fail to act, the specific consequences would be as follows:
- The Treasury would be forced to default on legal obligations of the United States, causing catastrophic damage to the economy, potentially much more harmful than the effects of the financial crisis of 2008 and 2009.
- A default would impose a substantial tax on all Americans. Because Treasuries represent the benchmark borrowing rate for all other sectors, default would raise all borrowing costs. Interest rates for state and local government, corporate and consumer borrowing, including home mortgage interest, would all rise sharply. Equity prices and home values would decline, reducing retirement savings and hurting the economic security of all Americans, leading to reductions in spending and investment, which would cause job losses and business failures on a significant scale.
- Default would have prolonged and far-reaching negative consequences on the safe-haven status of Treasuries and the dollar’s dominant role in the international financial system, causing further increases in interest rates and reducing the willingness of investors here and around the world to invest in the United States.
- Payments on a broad range of benefits and other U.S. obligations would be discontinued, limited, or adversely affected, including:
- U.S. military salaries and retirement benefits;
- Social Security and Medicare benefits;
- veterans’ benefits;
- federal civil service salaries and retirement benefits;
- individual and corporate tax refunds;
- unemployment benefits to states;
- defense vendor payments;
- interest and principal payments on Treasury bonds and other securities;
- student loan payments;
- Medicaid payments to states; and
- payments necessary to keep government facilities open.
Failure to increase the debt limit in a timely manner would threaten this position and compromise America’s creditworthiness in the eyes of the world. Every Secretary of the Treasury in the modern era, regardless of party, has strongly held this view. Given the gravity of the challenges facing the U.S. and world economies, the world’s confidence in our creditworthiness is even more critical today.
I hope this information is responsive to your request and will be helpful as Congress considers this important legislation.Sincerely,
Timothy F. Geithner
Monday, January 03, 2011
This one is to long to post entire thing...
Forecast 2011 - Gird Your Loins for Lower Living Standards
Introduction
Sheesh. Was I ever wrong last year about those stock market indexes. I called for Dow 4000 and look where the darn thing ended up: 11,577.50. Some of those fabled "green shoots" must have grown clean through my brain-pan while I slept off 2010's New Year's Eve festivities.The damage was so severe, apparently, that I missed the takeover of Wall Street by front-running high frequency computer programs battling for supremacy of the algo-space which, along with massive insider trading, daily tweaks stage-managed by the Federal Reserve via their trusted allies in large banks, and relentless propagandistic cheerleading on the theme of if-you-wish-it-so-it-will-be, kept the Dow Jones and Standard & Poors indexes in a frothy state of perma-levitation through the year.
The outstanding question from the get-go of 2011 is just this: can a political economy be kept floating along like a Winnie-the-Pooh balloon on gusts of sheer fakery? To me, the simple answer is no. The people running things in the USA have tried everything from pervasive accounting fraud to complete opacity in trading procedures to looting the republic's future. The consensus trance of "recovery" makes itself manifest through every conduit of public utterance - cable TV news, The New York Times, the pronouncements of every last elected official - even though the Consumer Price Index omits items such as food, gasoline, and heating oil in its calibrations, while heaping on fictional "hedonic" adjustments.
What's left of the American economy is a web of financial rackets divorced from the production of real wealth, dependent on an elaborate computerized three-card-monte edifice of swindling. Those groans and creakings you hear are the agonies of this ediface swaying under its burden of lies, while underneath it the ground of history shifts.
A secondary outstanding question - I get it all the time - is whether the people running things know how fake this picture is, and how horrifying the view behind-the-curtain is. Does President Obama understand the relation of our energy predicament to the workings of our economy? How could he not? Certainly he has had a conversation or two with Energy Secretary (and eminent physicist) Steven Chu over the past two years. Mr. Chu should have explained to the president that a decline in the primary energy resource used by an industrial society portends a decline in living standards, which can be expressed in an economy, for instance, by people having less money, or by people having lots of money that is increasingly worthless. This concept may lie outside the strict purview of physics, but surely somebody like Paul Volker was at hand in the White House to connect the dots - and perhaps explain further that anything in the picture beyond that equation amounts to a looting operation by people positioned to systematically cream off the dwindling equity base of a roughly 200-year-old venture.
By the way, to aver to "people running things" is not evidence of a persecution complex. Lots of people are in positions to make decisions. The president may be a hero, a con man, a victim of history, a bungler, a hostage to events - but you can be sure that he makes real decisions that affect people's lives every day. Where I depart from darker views is the idea that there is some shadow gang of hidden puppeteers behind the visible leadership - the Council on Foreign Relations, the Trilateral Commission, the Bilderbergers - bent on a quasi-religious crusade to impose "one-world government," or some kind of totalistic domination scheme out of comic book politics. I denounce such views as childish, deranged distractions from a reality that is challenging enough without the intrusion of paranoid fantasies.
If there are "bad guys" or string-pullers on the scene, then they are figures in plain sight, like Jamie Dimon and Lloyd Blankfein at the big banks, or John Paulson in his hedge fund, or the many figures who have moved back and forth between Wall Street and government in recent years, and their machinations are pretty well understood, and explicated daily by diligent observers on the scene - from William Black to Yves Smith, to Simon Johnson, to Janet Tavakoli, and many many others. The legerdemain of the Federal Reserve in shoveling money to dominant banks has fooled only those who exhaust their attention on The Real Housewives of Beverly Hills, Lady Gaga, and the National Basketball Association.
The larger riddle of life-in-our-time surrounds the absence of the rule of law in money matters. To say that people are actually running things out there doesn't mean that are running them effectively or optimally. The US Department of Justice, for example, appears to be led by a zombie, Attorney-General Eric Holder, somebody of this world but no longer quite in it, who is pioneering a new method of Zen law enforcement based on a maximum of doing and saying of nothing. Of course, my ongoing theory since the national election of 2008 is that Barack Obama has been warned repeatedly by many credible figures that any move to disturb the operations of banking would bring down such a wrathful ruin on this nation that he had no choice but to keep his hands off the levers of enforcement. In fact, it's the only theory that explains adequately the yawning gap between reality and the representation of it by those assumed to hold authority.
Whether we can overcome these obstacles to action and move this crippled society to a re-set of daily life consistent with what the planet provides is a whole other question. My guess is that we will eventually be dragged kicking and screaming to this re-set, which I have described in my book The Long Emergency and my novels World made By Hand and The Witch of Hebron. That outcome is rather severe, basically a "time-out" of unlimited duration from the orgy of techno-comforts that have defined existence in "developed" societies for many decades. It implies a massive loss of things that people will not let go of, and so the political games around money matters really all amount to one thing: a campaign to sustain the unsustainable at all costs. It obviously requires monumental levels of mass self-deception, of pretending, of fakery, of lying, of denial. The psychology of all this is another thing that is thoroughly understood, but such is the collective anxiety about our situation that knowing how-and-why we behave a particular way does not alter our behavior.
These have been my preoccupations in recent months, and they mostly revolve around what happens in the USA, but there is a wider world out there and I sense that the more clarifying actions will arise out there in the year ahead. Perhaps the most striking thing about the scene last year (and several preceding it) is the eerie absence of major disruptive events on the world stage. This suggests a dangerous build-up of tensions that are bound to release - and releases of this kind are often destructive, like the energy stored along tectonic fault lines. In fact, I'm describing many points of tension, which have the potential of setting each other off in chains of destruction. And in this fractal disposition of energy flows anything can happen.
The Forecast...
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