More from the road trip. The bridge has so many cool looks...
Tuesday, March 29, 2011
Make No Mistake
Taking in Charles Ferguson's excellent documentary, Inside Job, about the dark doings of Wall Street in our time, I confess I was awestruck all over again at the complete surrender of Obama to the very characters who embodied the corruption that rotted our system from the heart outward. Summers, Rubin, Geithner, and a host of other revolving door grifters who did everything possible to set up the implosion of banking, defeat the rule of law in money matters, and ruin millions who wanted nothing more than something useful to do in this society for a living wage.
Most impressive of all in this brave film were the shameless academic mandarins caught on camera trying to weasel out of their greed-driven misdeeds - Glenn Hubbard, chair of the Columbia University Econ department, a perfectly programmed polished WASP (like out of a "Ken" doll box) on the outside, slithering corruption inside, who played a major role in removing all restraints on Wall Street, then served as a director on the boards of several predatory financial giants, including the biggest, Black Rock, and pretended not to remember if he got paid for it; Martin Feldstein of the Harvard Econ department, in-and-out of government like a rat in a cheese-box, who sat on the board of AIG in the months before it blew itself up on credit default swaps, and who saw nothing about the company's operations that gave off a bad odor after it entered the most massive government receivership the world has ever seen; and most memorably Fred Mishkin, former Federal Reserve governor, now an academic rover, who wrote a cheerleading report for the Icelandic banking system about five minutes before it collapsed, then changed the report's title from Financial Stability in Iceland to Financial Instability in Iceland, then denied it on camera in the face of obvious evidence, then forgot whether he got paid six-figures to write the glowing report, then dissolved on camera into a maundering puddle of indignity and humiliation.
How do these rogues survive the disclosure of their turpitudes? Is there no one at places like Harvard and Columbia who has any sense of shame or even an inkling of disappointment that they employ such odious hustlers? Apparently not. This is a system with no mechanism of self-regulation left. And there's Obama at the tippy-top of it serving like a department store mannequin with a Department of Justice that someone has hung a "gone fishin'" sign on. I voted for him in 2008, and I want to start a movement in whatever's left of the Progressive core to get rid of him. Being a decent, presentable fellow with a nice family is just not enough. Even his vaunted speech-making abilities have gotten on my nerves. If I hear him say "make no mistake" one more time, someone will have to restrain me from kicking in the flat screen TV. Obama, it turns out, is the mistake.
Can't any of us begin the reform of the Democratic Party, starting with resigning from being Wall Street's bitch? Granted, the age of labor unions may be over for a while, maybe forever (who knows?), and the age of government money hand-outs on the grand scale to everybody-and-his-uncle, too. But how about just a party of intelligence and courage? Wouldn't that be enough to start with? A party capable of setting some limits and enforcing them. A party able to understand the signals that the future is sending us about resource scarcity. A party willing to engage and defeat stupidity, such as climate change denial, and drill-drill-drill cretinism, and "creation science," and all the pietistic hypocrisies of the Sunbelt know-nothings. A party willing to drag characters like Lloyd Blankfein into a court of law to answer straight-up fraud charges. A party willing to admit that if you can't control both the terrain and the people's behavior in Afghanistan, then there's no excuse for prosecuting a war there.
I have a lot of hope for the millennials, the young people just coming up. They're going to get sick of living in an ethical vacuum and sick of political paralysis.Their brains are going through the final stage of development where it arrives at the ability to make judgments. They are going to judge the Boomers and their X'er successors harshly and they're going to remind us that Americans are capable of valiant action even without the trappings of jingoism and sports metaphors.
In the meantime, we can look forward to a year of spectacular unraveling. Our money system probably can't survive the crack-up of revolving obligations that were ginned up so that bankers could cream off fortunes from every exchange of any sort of paper on the face of the earth. The European banks have nowhere to go anymore with Ireland and Portugal crapping out. Bond-holders are finally going to have to eat a lot of losses. Governments have fallen and more will go down - but, of course, more to the point is what governments will follow them in power? Probably more audacious ones, run by people who intend to act, perhaps even badly.
The Middle East and North Africa have the look of spinning into World War Three. The action just doesn't seem like it's going to simmer down anytime soon in a half-dozen nations that have started gunning down their own people - and there's Iran sitting rather quietly on the sidelines, or so it appears for the moment, as the whole region rearranges itself to suit them better. Wait until Hezbollah starts lobbing missiles into Israel. You'll see the big "tilt" sign light up the sky. Anyway you slice it there, America better get ready for a lot less imported oil. There's really nothing we can do that will change that now, and drill-drill-drill will not come close to mitigating our losses, no matter how much Larry Kudlow wrings his hands.
Poor Obama. On The global chessboard of fate, he's the powerless king facing down ranks of dark knights and implacable bishops. All he can do is sidestep their onslaughts. Even the pawns are beginning to moil and roister in the background. He'll be on TV tonight. Make no mistake.
Monday, March 21, 2011
An Odd Rumination
Can't we just drop Pee Wee Herman on Tripoli? Surely this shocking manifestation of everything toxic in America's existential zeitgeist arsenal would send the Gadhafi corps shrieking for the blank Saharan interior - somewhere between Murzuk and Timbuktu - where timeless dunes shift in the eternal wind, and the cares of modern life, armies, geopolitics, banks, bombs, and crusaders in red bowties are but grains of sand under the uncountable stars. To recline there, outside the tent, in the bracing chill of the desert night, against the warm backrest of a sleeping camel, with a glass of strong tea, would bring one into communion with the peace of Allah - don't you think?
But it appears we're going for the heavy ordnance instead, aided by the latest and greatest in video-gaming technology, and, by Gawd (yes, that one, ours, the one Michelangelo painted in Rome) we are going to give this cheeky Gadhafi fellow something like a Semtex colonoscopy and few around the wide world will shed a tear as he is translated into just another late-night snack for the rats and scorpions.
Good gracious what an exhausting month this has been!
Most remarkable in the tsunami of events last week was the peculiar dearth of actual reported news - as in hard, reliable information. CNN played the same loop all weekend of brave Japanese firemen marshalling outside the Fukushima reactors, trotting this way and that way in disciplined ranks, while alarms went out about radioactivity showing up here and there, in milk, spinach (did it grow overnight?), and on airline customers de-planing in the otherwise spotless reaches of Dallas, Texas. My correspondents tell me that the radioactive scare meme is way overblown, with the number of actual dead so far at exactly zero from the whole reactor event- and they may be right, or not, though it is hard to imagine no severe consequences at all over time from this disgusting mess. More to the point perhaps is the loss of about 30 percent of Japan's electric power. What will they do in the long agony of sorting things out there?
I have a peculiar fantasy about Japan. It burbled up in my mind even before the earthquake-tsunami-reactor disaster, and I conceived it in rumination upon Japan's weird twenty-year-long economic malaise, as the nation's population shrank, and its debt climbed to astronomical heights, and its young people lost heart, and it seemed just to go through the motions of whatever modernity required of them - ship the cars, package the robot parts, show up at the salaryman drinking contest, get stuffed into another late-night commuter train. I don't claim to be a Japan expert, but I think all this was getting to them in a deep, major way. I think they perhaps secretly longed to get back to something like an older traditional Japanese society - the one before car assembly plants, big steel ships, chain reactions, and fluorescently-lighted pachinko parlors, back to the society that blossomed and fruited in cycles of centuries on those beautiful rocky, sea-washed islands into a culture saturated in artistry - unencumbered by idiot religions or the bothersome neediness of other nations.
I can't shake the odd feeling that Japan was looking for a way to get back to the 19th century, and perhaps even deeper beyond that - to the dream-time before they made the fateful decision to industrialize. The earthquake-tsunami-reactor moment is their chance now to begin that journey. Frankly, I don't know what else they can do. Japan imports over 95 percent of the fossil fuels it uses (that would be oil, coal, and natural gas). Does anyone think they'll be able to continue that indefinitely? Sorry, I just don't see it under any circumstances. And, anyway, the geographic region where the bulk of the world's oil comes from is in the process of blowing up. The Middle East and North Africa (MENA) are like some kind of mansion where fire has broken out simultaneously in the kitchen, the conservatory, the media room, the master bathroom, the chauffeur's apartment over the garage, and the pool house, and whenever the flames are doused in one spot, they break out in another. Yesterday it was Syria and Yemen. Bahrain is under lockdown. The Egyptians are having second thoughts about the loss of a grinding stability, trouble is stirring up in Kuwait, Iraq is like a crazy person in the rubber room of history, and who knows what kind of spells the vizeer Mahmoud Ahmadinejad is laying out in his Kevlar sanctum. There is just too much tension in the world and it is demanding release in the most vexing ways.
So, I can see the Japanese people - a deeply homogenous society - veering toward an as yet un-articulated consensus: let's just get out of the modern world. Let's go back home. Let's don the kimono and the hakama, get us some horses, sharpen the katana, and kick back in the chaniwa garden with a bowl of green tea - and forget about all that dirty, disgusting, dangerous, heavy manufacturing-for-export (to an insane world) nonsense. History may record their industrial adventure as a weird blip of activity in a much longer timeline. As it will for us and everybody else, I believe. In fact, this fantasy about the Japanese shrugging off the toils of modernity is exactly what all the other so-called advanced nations of the world will find themselves doing sooner rather than later as we all take the road back to a world made by hand. The Japanese may just be the pioneering exemplars of the universal process.
What we're seeing these days is an epochal unspooling of hypercomplexity. The world just can't take anymore of it. The world is telling us to cut it out or it is going to kick our upright bipedal asses. Of course, America may be absolutely the last society to get this message. We'll receive it in the car-wash, no doubt. On our iPhones.
Saturday, March 19, 2011
Monday, March 14, 2011
Rock Me on the Water
There was Japan, standing quietly offstage all these years, minding its own business, more or less - though unwinding financially and socially at some very deep level for two decades, debt rising around everybody's ankles like a silent, insidious tsunami, population dying back, young people demoralized by the "salary-man" culture with its meager consolation of nightly drinking sprees ending in micro-hotels with rooms like funerary vaults - Japan, who had been horrifically chastened after its mad military-industrial outburst of the last century, who shook all that off to become the world's most dependably, civilized nation.
And now, the sorrows of Job.
The world was very busy watching the ME/NA countries go batshit in history's center ring, but the spectacle of wreckage in Japan, unfolds now like the slow-motion blossoming of some gigantic evil chrysanthemum and you get the ominous idea that this is only the start of a story that will grind on and on as more bodies are discovered and the nuclear fiasco burns deeper and Japan's finances enter a death spiral. How could you watch those videos of the sickening wall of black water that slammed through Sendai without wondering how many doomed people it carried unseen beneath the rafts of cars, and the sideways ships, and the eerily floating houses?
I tried to follow the story on American cable TV Sunday night but with the exception of stolid, dogged CNN, all the other news channels were playing one sordid and titanically stupid program after another: meth freaks, show-biz narcissists, and sex chatter without sex. What a nation of morons we are. Over six hundred cable TV stations and only one that even tries to tell you what is going on in the world. How many citizens of this republic were watching a dessert chef undergo staged humiliation for the failure of a cupcake batch while two nuclear reactors melted down across the Pacific? We deserve what just happened to Japan three times over. And we might just get the equivalent at least in social and political trouble as our money follies unwind and normal living here becomes untenable on the old terms.
So many things are shaking loose now in this world-wrapped-too-tight that it is hard to track where they all overlap, but I will try today.
ME/NA has gone critical overnight. Saudi Arabia wants to occupy tiny-but-strategic Bahrain, and Bahrain says that would be an act of war - though it's hard to conceive how they would wage one against KSA, which is up to its eyeballs in US supplied state-of-the art aircraft and all sorts of other dangerous swag. The Shia population wants to blow the little Kingdom wide open; they'll be lucky if the Saudis don't inadvertently turn it into an ashtray, just to see if their equipment works-as-advertised. That might be exactly what Iran wants - poised, as it is across the Persian Gulf and wishing deeply to evict the US Navy from its deep-water port in Bahrain. It would be unlikely if Iran was not helping to provoke the Shia uprising that is ongoing in many of the states on the west side of the Gulf. I only wonder why Iran has not given a green light to Nasrullah of Hezbollah in Lebanon to start a rumble there with Israel. It can't be anything akin to a sense of political responsibility. More likely just fear of how the Israeli air force might answer this time, with events moving so quickly and the world's head spinning so fast, it can barely focus on one particular place. Anyway, stay tuned in the Persian Gulf.
Meanwhile, the dithering Euro-American alliance finally takes its green light from the Saudi-dominated Arab League for a NATO no-fly zone in Libya - or the eastern provinces of Libya for now - in hope of putting the schnitz on Mr. Gadhafi's shenanigans. I don't know what the political idea is behind this - perhaps little more than the notion that there must be some other colonel in the Libyan military who is less mad and more tractable than proven maniac Gadhafi. It would be nice for Euro-America (and China, too, actually) if the Libyan oil industry could survive all this intact but as Michael Klare pointed out on the Web last week, it is generally the case that oil production goes way down permanently in all nations that endure political uproars. Anyway, a no-fly zone involves a lot more than just shooting down Gadhafi's aircraft when it dares to take off. It starts with destroying the planes and helicopters on the ground, and moves forward quickly to the question of boots-on-the-ground.
At the moment, the oil markets don't know what to do. Some loose talk says that Japan will not need oil for a while, due to a wrecked economy. I dunno about that, with the reactors melting and twelve million people without electric power there. Let's remember, they are not the only people in the world who buy oil. In fact, everybody but a few savages in some tiny backwaters of the rain forest use oil - and even the savages do indirectly since they trade for things that come up the Amazon (and the rivers of Borneo) in boats with motors. (Not to put too fine a point on it.)
Most interesting to me this morning are the financial implications of all these things and let's start with Japan. Monumental doesn't seem to describe the unholy mess there, just the sheer awfulness of all that mud, twisted steel, radioactive trash, and decomposing human bodies scattered amongst and within it. The cost of it seems beyond calculation, but the first questions might be how does a deeply-in-debt Japan raise some cash to begin digging out and (possibly) rebuilding (and I add that qualification because I don't know that a lot of this lost stuff will be rebuilt at all). But it will be cleaned up and sorted out. The obvious answer to the funding question is that Japan sells foreign bonds, namely US and European.
That will not be a good thing for Euro-America. Japan was the quiet benefactor last time the European sick countries had to roll over their debt payments, and nobody wanted to buy their paper. Japan went in and hosed up their debt, allowing them to enjoy one last Christmas of seeming political normality. Now it's rollover time again in the Euro-Zone and not only will kindly Uncle Japan not be present for the bond sales, they will be selling off the stuff they already hold, and it is hard to see how the European banks digest that ugly bolus of reality.
Similarly, in the US. Japan has accumulated about 800-billion in US debt paper. They have more-than-generously propped up our operations here for years by buying the stuff. Now they would seem to have little choice but to liquidate a bunch of it and cancel their seats at the upcoming auctions of new paper issues. That leaves Ben Bernanke alone in his office with a shit sandwich for lunch. What to do now, Ben? Who on this planet is going to buy more debt of a people who spend their lives in zombie-like thrall to the Kardashian sisters? No, Ben's going to have to eat the sandwich himself, a least until the end of QE-2. Or watch interest go way way up to the point where the risks are acceptable to outside parties - but that would only destroy the US Economy and American government at all levels, since we can't meet our obligations even at ZIRP levels - and, anyway, who would step forward now to buy this crap under any circumstances? (Echo answers....)
The most beguiling financial idea of the week comes from Jim Rickards of Omnis on Eric King's interview website who says that the sheer load of stuff in the Fed's vaults is now so enormous that further QE is quite unnecessary to continue monetizing America's debt. All they have to do over at the Fed is roll over the maturing securities they hold and take the money and buy more securities! In other words we now have at our disposal a perpetual motion money-generating engine. And, by the way, if I do sound a tad facetious its not because I disbelieve what Mr. Rickards is telling us. I do, however demur when it comes to the question of consequences. Despite the elegance of that operation, it still remains a fixed law of the universe that you can' get something for nothing. What Mr. Rickards describes is a trick for buying just a little more time using the residues of wealth that already exists. But then the time comes when you have even burned through the residues of your wealth, and then what?
Wednesday, March 09, 2011
Reality Optional Nation
Before retiring to a casket packed with clods of my native soil, I tuned in the Sunday night late news to find the political struggles of Araby banished from the screen. Charlie Sheen was all over the place, his defiant chin thrust forward as if auditioning for the role as our next president. I hope the execs at Fox News were paying attention, especially now that they've lost half their commentary squad to the toils of campaigning. Think of it: Charlie Sheen in the White House. With a pound of pharmaceutical-grade blow. More intellect in one seat than since the night Thomas Jefferson dined with his water spaniel, Hercules. No mouthy "advisors" cluttering up the West Wing (or disrupting the laser light show of Charlie's thoughts). And there is, of course, the memory of his dad, who a lot of prayerful Americans recall as a president, somewhere maybe between Clinton and Bush Two.
An Alzheimers fog creeps across this land, from sea to shining sea, as its intellectual class - theoretically the brains of this outfit - utterly fails to get a grip on what is transpiring in this world. The failure of leadership in America is comprehensive and deep. President Obama's top aide, Bill Daley, floated out the notion that we might draw down America's Strategic Petroleum Reserve (SPR) so that the imprudent folk who traded-in clunkers for new Ford F110s and Cadillac Escalades won't feel any pain from four-dollar gasoline.
Harken, now - a reminder to the rest of you out there who do not have tubeworms boring tunnels through your brain-pans: there's a reason the petroleum reserve is called "strategic." We didn't stockpile that oil to pretend to be the world's "swing producer" for a month and a half, just to knock the price down twenty-seven cents a gallon so that soccer moms could feel more comfortable bidding for an Auslini Veneto crocodile leather handbag on The Shopping Channel. Strategic was meant to imply when something really really bad happens, like a national emergency, say, with military overtones.
The failure of the news media, trapped by the diminishing returns of technology, grows more epic every week. We've never had more media outlets in the history of this land, or been more poorly informed. Mental fossil George Will fired off a salvo last week against fixing the US railroads. He thinks it's just a sinister ploy to snatch the people's "individualism." Perhaps George hasn't noticed that other things are operating out there in the polity-space to turn the folks of this land into zombies. After all, they were long ago transformed from "citizens" into "consumers" - without a peep of complaint from anybody - so, having already surrendered their duties, obligations, and responsibilities to anything beyond their hunger for Cheez Doodles, they might now find themselves suddenly devoid of "individualism," staggering down the highways in mobs wherever a whiff of blood emanates from a strip mall?
I'd have to guess that the Maryland DOT ran a few lanes of the Beltway through George Will's head, perhaps so he could drag race with Glenn Beck, Rush Limbaugh and Senator Jim DeMint to see who can get America to drive off a cliff fastest. Oddly, the basic question that now thunders through North Africa and the Middle East has not been heard on the fruited plains of this-land-is-your-land - viz: who gave this cohort of morons the right to tell us what to do and think?
Which gets us to the true matter at hand: the matter that the world is suddenly exploding in an epic phase-change rearrangement of the political order, starting with the lands that own most of the world's exportable oil. In this vein, a message to readers of George Will and other old-line "thought-leaders" of America's commentary regime: If you think the action in the streets will be limited to these sandy outlands seven thousand miles away, then your last thoughts will not be comforting when the zombies you helped to create turn up slavering in your driveway.
By the way, this doesn't let President Obama off the hook. His consistent failure to tell the truth about the fragility of our situation, to make the case for getting our citizens out of their car-prisons, to promote modes of living that comport with reality - the president's apparent cluelessness in every dimension of this crisis is something that historians of the future will shake theirs heads over in wonder and nausea (if the notion of history even survives the oil age). And for the moment we'll put aside some other rather pressing matters such as the AWOL rule-of-law in our banking operations.
One historian, Michael Klare of Hampshire College in Amherst, Mass, made the trenchant point last week that oil nations which undergo political upheaval invariably end up producing far less oil, permanently, no matter whether the political outcome is better or worse than before. So, notwithstanding the media fantasy in our land to the effect that America's founding fathers have been reincarnated in places like Egypt the past month, it is unlikely that there would be anything but an extreme downside effect on the world's oil supply, even if the successor to Hosni Mubarak (as yet unknown) turned up in a powdered wig and waistcoat, with the Bill of Rights magically translated into Arabic in his beneficent hand.
I was a young newspaper reporter during the 1973 OPEC oil "embargo" (so-called). Whatever else history records it as having consisted of - bluffing, hoarding, fear-mongering, market manipulation - a few things are inarguable. It arose suddenly out of a political conflict (the Yom Kippur War), and it disrupted life in the USA to a degree unknown since the Second World War - or for that matter until the present day, even counting the trauma of 9/11/01. My sense of things is that we are now entering an oil crisis much more severe and very likely permanent. If production is lost through political strife in Libya, Algeria, Saudi Arabia, the Emirates, Iran, Iraq, or even a lesser combination of them, it will crater the global economy and change how we do everything here. George Will may even find himself having to ride a bicycle down the freeway in his head.
Sunday, March 06, 2011
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