Tuesday, July 21, 2009

Bread and Circuses Until the Credit Runs Out

Fed Chairman Bernanke appeared before Congress today and again pushed back the predicted date of any "positive job growth". Banker speak for "we will continue to hemorrhage jobs and spiral down toward the abyss". Not unreasonable with nothing being done about the causes of job loss. So as more jobs leave the country we are left with fewer and fewer people that live a middle class lifestyle and provide business for all the people pushed into service jobs because their jobs have left the country.

More twenty something's are living with their parents and thirty something’s are returning to do the same when their homes are gone. But as the parents lose their homes in health insurance bankruptcies the places of refuge are disappearing and soon you will see multiple generations homeless.

State job counselors are telling men who make up 80% of the newly jobless to forget about ever getting a job like they had and to go after a women’s job. The catch phrase is "this is not a economic downturn but a fundamental restructuring". The obvious question is what do the women do who find themselves competing with men for fewer and fewer jobs as their jobless rate starts to climb. If they have kids maybe and I stress "maybe" they can get welfare for a time, but thanks to Clinton welfare has strict lifetime limits and a benefit rate that guarantees slow starvation.

Where do the homeless go when all options run out? In the Sci-fi movies the food wafer plant are used as a metaphor for the deathtrap slum, the fascist work camp, unchecked disease outbreaks and on and on. Or we could see a new dark ages where control is maintained through fanatic religion where the Sabbath is observed with executions of the so-called sinner and crusades are launched to further world domination. With a willfully ignorant population fixated on the circus and unaware how close they are to running out of bread, democracy is becoming a wistful dream.

An update on the banking collapse: four more banks were seized by the FDIC over the weekend and the 18th largest bank, CIT, who specializes in financing small and medium businesses, is again likely to file bankruptcy. They had announced a deal with bond holders yesterday but as of today the deal appears to have fallen through. A few billion would reportedly turn things around for CIT and the thousands of businesses that will fail with them.

The Inspector General for the TARP program now estimates the risk the Government has assumed to bail out the really large banks like Goldman Sachs to be 23.7 Trillion. How exactly do the Republicans plan on paying for the bread and circuses?

4 comments:

NotoriousQED said...

Is it possible that we are witnessing the beginning of the collapse of the capitalist monetary system?
Seemingly plausible now is that the tip of the Technological Unemployment spearpoint is beginning to lay waste the American lower-middle class, and the conseuences of this will be a restructuring that the Bilderbergs and Mellon-Scaifes arent going to appreciate until their sorry asses are fed to the dogs

Anonymous said...

Ravi Batra, the SMU econ dude says this fall the market will implode again. We'll see.

Anonymous said...

I'm being as usual a bit negative. It has taken us the time since Ronnie's time in office to get her, one of the leading players in the money game (Goldman Sachs) has been playing games since Great Depression days and their tentacles go deep in government and of course in business. So deep are they in America and the world that it will take a fundamental change, a sea change in how we view life and money to get them to go away.

We have leadership in the financial world that do not care about anything but money and getting more of it for themselves. If things had been different for them they would be hustling women or drugs or guns for the mob but they have found that they can make more money in somewhat legal ways (unethical but legal)by conning us in various ways to buy the financial equivalents of ptomaine cocktails all the while telling us how good they taste and how good they are for us. They know how toxic they are to us (the us being not only you and I as individuals but "us" as a society) but they don't care.

However we all do share some of the blame...who has not said when buying a house..."such an investment" rather than thinking..."I'm buying a home.".

We ignore the issues and don't hold politicians to their promises. We don't vote the bums out. We vote for one issue and we get played for idiots by both parties and by single issue industries (NRA, abortion, free trade, gay rights to name just a few). We sit in front of TVs or hang out at ballparks and tracks, ignore union meetings and don't get involved politics or even bother to write or call our "leadership".

We refuse to look back at history and learn from it, ignoring the biggest change in America, the post WW II generation...brought about by education, the GI Bill and other efforts to educate more people. Now we say...not one penny more for taxes for such wasteful things...better we spend it on bailing out thieves that will continue to steal from us and paying for wars that can't solve the problem that they were started to solve.

The basic problem is that we have companies that control the government that don't care about the people, they care about us as long as we have at least one more dollar to steal from us but past that we are so much rubbish. But and this is the big but...we let them steal the government and in some cases we helped them steal it, just as union members that sit back and don't pay attention to their union as a people Americans have been tuned out for years and when we do vote we vote on the last sound bite or one issue ad that we saw the day we hit the polls.

So many groups speak for us, small business is being spoken for by a group that works against their interests. The NRA supports people that will make sure that the average NRA member will have the right to have a gun, they just will not have the money to own one. Free immigration is being pushed by business that enjoy the low cost labor that is not only cheap but unable to complain about those silly safety and working conditions rules.

I think we are seeing either the end of America in any way that we would recognize (those of us old enough to recall the pictures of Indian slums fifty years from now will know what it is like to live in the American version of them) or it will be the end of American style capitalism.

William_Shatner said...

Howdy Prairie 2 -- or should I call you "the sage brush Sage?"

First comment here -- I've heard about you from Mike Malloy.

>> The liabilities to financial institutions is something Conservatives/Republicans/NeoCons/Birthers/closeted Furry Fetish devotees fail to mention when they complain about the HUGE spending that Obama invented that is to go to health care reform or some stimulus.

I was hoping Obama would be FDR in his second term, but obviously, he is doing an impression of FDR in his first term when he listened to all the high finance experts and bailing out the top. Quick Lesson: if Chase Bank has $30 Billion in TARP funds and you have NONE -- what is the likelihood of getting a loan? Now, if I had $30 Billion, I could get a loan and a financial adviser who would tell me to take that to a Venture Capitalist Bank and multiply the money to take over a company, pay myself back with some fun money on top, and sell of the pieces,.. leaving of course, the original name of the company to hold the debt obligations.

A banker is someone who will loan you an umbrella on a sunny day, and repossess it when it rains.

Reading "Web of Debt" by E. H. Brown,... tells me that Fractional Reserve Banking, is always going to be a balloon of debt, that requires someone to go into debt to have any growth. This bubble is always doomed to pop, because on the upside you get money for nothing 10 times, and when the debt gets too great, you get a 10X deflation rate when there are foreclosures.

Another good economic reference I recommend.This man is angry nearly every day. Good reading.

>> My own opinion is; that we might be better of if the market collapses than if it survives. The TARP bailout, allowed banksters to shuffle funds. What we really have right now, is the minstrels playing, while the upper class boards the limited supply of life boats and the rest of us are sold shares of the Titanic. The Wealthy that new exactly what they were doing with the Credit Default Swaps, and getting rid of Glass Stegall act, are calmly removing the valuables.

They will come back to pick up the ashes and rebuild, amongst a grateful and desperate populace. The religion of this group is order, and they brought order and poverty while Developing the Latin American countries -- they've just run out of places on the planet to exploit. Just as ancient Rome did. Now they are doing here what they've done overseas.

But if the Dollar collapses -- so do our debts. Some of us might have a little nest egg, but it's not so much compared to the hamster wheel we are stuck on. Those fearing socialism because they plan on being a CEO one day really don't know what is good for them.

There is a lot that can be done on the community level to make us all smarter and self-sufficient. We could all use a diet and some time growing gardens.

No, it would be a lot worse to limp along and lose our Democracy. Relying on the tender mercies of our betters and maybe getting some charity from someone who EARNED $20 Billion a year. That should be a blog topic on its own; that we've forgotten the idea of citizenship and valuing work vs. ownership and instead of big ideas in government (with us in charge), what is preached is that we give everything to the haves because they are so charitable.

I'd rather have 50% taxes on people making $2 Million a year. If they complain that they are not motivated anymore -- I'll be willing to trade places with them.

Bill Gates donating $80 Billion doesn't solve the social damage it causes from having destroyed 8,000 entrepreneurs to consolidate that fortune. We have a cult of the wealthy now until people figure out why we made all the "socialist" changes during the Great Depression again.