Savor The Moments

It’s maybe worth reminding ourselves that events in late 2008 prove there are more things in finance and geopolitics, Keith Olbermann, than are dreamt of in your ‘philosophy’. Paulson flings $600 billion more in fictional Fed money at the already sloppy financial wall this morning on top of Team Boy King’s unsubtle floating of a $500-700 billion ‘stimulus’ plan yesterday. The delusions continue apace.

The Boy King (perhaps wisely in the short term, but definitely foolishly in the medium) avoids two crushing truths. First, he and the American people are no longer masters in their own house. A future sustainable American standard of living based on a real economy will require a 25-30% reduction in consumption across the board. No matter what is said at a press conference. There is and will be no ‘return’ to a ‘stable’ economy as invoked circa 2003. That jenga block got knocked over by self absorbed boomers long ago.

Blue Screen Of Death

Second, hyper inflation is now all but unavoidable. The printing presses are running non stop. This is not the first time a Great Power debased its currency to paper over inconvenient truths. Yet history also teaches such expedient measures always fail and boomerang in the medium term. Already we see signs from erstwhile pillars of the dollar economy like the Bank of Japan balk at holding the giant hand grenade for Joe the Plumber let alone the Masters of the Universe. Imagine. They want the U.S. Treasury to issue bonds in foreign currency like, say the Yen. (This defeats the whole printing press thing, those fiendishly clever Japanese!)

Hyper inflation will not appear immediately. But will sooner than the voices whispering in Andrea Mitchell’s ear (at work *and* and home) can admit. The only immediate response Team Boy King can be expected to do for political – not economic reasons – is wage and price controls. You betcha.

Americans again forget history. Economies and sinews of economic productive activities do not sprout in a day, a quarter or even a year. Once the residue of the false, bubble and fraudulent finance economy is exposed and scraped away then what?

The quaint contempt Americans have for actual labor is on blatant display with the disparate reactions to and money poured on knowingly fraudulent banks versus millions of Americans who just happen to work for or depend on incompetent bosses in Detroit.

But let’s move past all that. What exactly are 20, 30 and 40 somethings with MBAs to do? They’ve known nothing but punching Excel spreadsheets and practicing their professional equivalent of phone sex on conference calls day after day swapping CDOs? What are they supposed to do the next day? Build cars? Bend steel in New York sewers? What do real estate brokers (ex house husbands or house wives) do now that they realize with a shock that $220,000 for doing literally nothing but driving people around to houses with a chipper smile is not a career? Pour concrete rebuilding I-95? This new reality is A Big Deal (and probably will not be recognized as such until Tom Friedman writes a book and gets it wrong again to boot). To quote Yul Brenner, ‘Et cetera, et cetera . . .’

Perhaps not days of wine and roses. But these few days should be savored nonetheless. A hard rain’s gonna fall.


  1. Dr Leo Strauss says

    Scam collectables for the Coronation are hilarious — in a way even more tacky than the absurd RWR ‘valuables.’ The certificate of authenticity is always a key touch, along with the notion that the valuation is in *real* Liberian dollars.

    But then people here are renting their English basement firetraps for $7,500 to see the inauguration. So what’s $200 for plastic plates to make the family’s memories sparkle through frozen pancakes years from now?

  2. Hunter says

    I’ve definitely detected that same fetishism lately, but as you say it’s preferable to finance fetishism. More than that, though, a certain building fetishism (whether manufacturing or infrastructure or whatever, but physical, useful objects) could be very useful to us now. The moment seems to call for it.

  3. A Random Quote says

    We are sure that at the present rate, Greek
    wisdom will be almost unknown to the general
    public within two decades.


  4. Comment says

    Question? Why does CNN allow a scam artist company sell bogus collectable Obama-pictured plates on their station? It’s a complete joke – with a fake-legit name that tricks the slower viewers into thinking this is a real historical society selling real collectable plates.

  5. Comment says

    Dan Pipes was one of the so-called legit people who were the force behind most of the guilt by association attacks against Obama for being associated with anti American personalities. So what did Pipes do after the election? He hired someone accused of spying against the USA. What a joke.

  6. DrLeoStrauss says

    Those silly Georgians — taking Cher Condi at face value. Will she find no peace? Maybe she tickle the ivories on ‘America You’ve Got Talent’ . . .

  7. A Random Quote says

    “Look, we’re supporting a former restaurant owner from Baltimore [Hamid Karzai] … whose family are the largest heroin dealers in the world. This cannot come out well.”
    ~Robert Baer
    (On Afganistan)
    Commonwealth Club 11/5/08

  8. says

    I think I detect a degree of what my good friend Daniel Davies calls manufacturing fetishism here. True, it’s preferable to finance fetishism, but it’s still a fetish.

  9. Hunter says

    A 25-30% reduction in consumption? Seems like that will be fairly strongly deflationary. Certainly Roubini thinks so. We’ll see how effective (or over-effective) the money-presses are.

    Here’s an interesting article on the rise of SSE on the right. Definitely worth the read (though TNR usually disappoints), especially for the odd old connections between people I associate as (foreign policy) neocons with the SSEites.

    Anyway, re: Alex’s last post in the last thread, here’s a quote recontextualized from the above Chait piece:

    “Aside from popular articles in places like the Journal’s editorial page, two classic tomes defined the tenets of supply-side economics: Wanniski’s The Way the World Works and George Gilder’s 1981 manifesto, Wealth and Poverty. Both have had enormous influence, and both capture the feverish grandiosity that is the hallmark of the Laffer Curve acolytes. Here is what makes the rise of supply-side ideology even more baffling. One might expect that a radical ideology that successfully passed itself off as a sophisticated new doctrine would at least have the benefit of smooth, reassuring, intellectual front men, men whose very bearing could attest to the new doctrine’s eminent good sense and mainstream bona fides. Yet, if you look at its two most eminent authors, good sense is not the impression you get. Let me put this delicately. No, on second thought, let me put it straightforwardly: They are deranged.”

    One detects an obvious affinity in temperament between these two wings of the Movement.

    Anyway, “What do real estate brokers (ex house husbands or house wives) do now that they realize with a shock that $220,000 for doing literally nothing but driving people around to houses with a chipper smile is not a career? Pour concrete rebuilding I-95? This new reality is A Big Deal (and probably will not be recognized as such until Tom Friedman writes a book and gets it wrong again to boot).” A hearty “Heh, indeedy” to that last line, but as to the first bit, why not? Is that not exactly what the incoming administration means when it contemplates a “massive infrastructure stimulus that will create millions of new jobs”? Does Obama not want exactly to put those formerly useless parasites who’ve nearly killed their host back to work (physically) rebuilding the host? Seems like as decent a plan as any to me. Not that the transition won’t be painful, not least psychologically as people have to relearn the value of physical labor…

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