The Blackhole in My Backyard
July 22, 2009
One day, out of the blue, huge black holes moved into the neighborhood. It had something to do with pay checks, mortgages and your home that you foolishly thought were yours. Suddenly the concern was whether or not the black hole would swallow or spit you out. Are you with one of the dying, dead or possibly reborn Detroit auto behemoths? You put your retirement money in Icelandic or East Europe funds. Some of you are customers or employees of dead banks. Were you foreclosed? Are you a realtor searching for non existing listings or a Buick dealer looking at an empty lot? Then you know the pain.
Billions have yet to experience such pain. After all, a 10% unemployment rate means 90% of us have jobs. So for most, all is well? Maybe, but the lucky will find there is no place to hide. Governments pump incomprehensible amounts of money into who knows what. You’ll pay for that, others will get rich. Whole countries remain on the brink of collapse. Are those high risk funds gone? Hell no, investing by the common man into spectacular risk Russian funds not only continues at an unprecedented level but grows at frenzying rates. Who can resist 60% gains in mere months? Guess what will happen.
Are you angry, furious or resentful about this mess? You should be although the “who, when, why, where and what” is sketchy at best. Huge amounts of money rush around the globe in a manner making drug cartels gasp in envy. Desperate governments feed the fever with major league pay outs, relief programs, bailouts and general flag waving. Will those fortunes end up with blood thirsty Russians, Canadians, Chinese and Italians stealing GM? Outsource IRS to India, save trillions. License DEA to the City of Tijuana. Can the Albanians really buy Bank of America? The LA Lakers may become Moscow Lakers. Obama can buy Iceland, Zimbabwe and Lithuania and merge them with already owned Michigan. Joe Biden mentioned the other day – “there will be some waste”. How much is that?
Billions of bucks head to some neighborhoods turned into a gleaming World Trade Center II or pit stops (think Disneyland) by new Autobahn from Houston to Wasilla, Alaska. Have your backyard house the Grand New HealthCare Agency Headquarter, named after veteran health care reformer Hillary Clinton (“USS Hillary R. Clinton”), co-chaired by Sanjay Gupta of CNN and Aldemar Rojas Mosquera of Colombia, pioneering huge leaps in modern medicine.
Most of you may not have noticed the riots, murders and domestic violence beyond our hazy horizons. The capitals and major cities of China, Russia, Bolivia, Greece, Bulgaria, Latvia, Lithuania, Iceland, France, Italy and Ireland have already witnessed riots or major protests over skyrocketing unemployment. Iran, proving anger is still a factor, could have gone up in flames but perhaps for different reasons. In the US, there are no protests in spite of being in the deepest of holes among the big guys. Ask yourself why silence prevails. Are you angry? Why not? How come your gearbox no longer engages in the slightest degree of emotion?
Angry or not, finding out who is to blame may seems vital. Stomp out the bad and the ugly. Rip their freezing hearts out, beat their deviant brains in. Feet in a cement block, let’m ride to the bottom of the Hudson, the Thames, the Seine or Lake Michigan. Well, for one thing, no one seems sufficiently upset for such measures. Second, the moral of this tale is that the ugly, bad and guilty includes you. Yes, you. And third, perhaps the real culprit is not the common foolishness of all of us.
Perhaps this System doesn’t work anymore. Capitalism, democracy, United Nations, the World Bank, G8, borders, quotas, poverty and riches may well be mere relics of the past. If Communism could die, so can democracy. The sorry fate of Wall Street’s bankers, brought down by the fury of you and I, can signal the end of Capitalism. India and China are the next leaders until perhaps they wipe each other out. The US will not be part of that club. Germany or Britain won’t be invited to the center table. You and I may find life turned upside down with the view deteriorating quicker than the One Minute Waltz.
Digressing from the financial nightmare for a second, the collapse of the American Dream started with the Vietnam War. Then the energy crisis of 1975 and the birth of Opec brought it home to Americans that no longer were they in charge. The Watergate disaster and the shame of Nixon showed how far south the system had gone. Iran and its US embassy hostages brought Carter to his knees. Reagan presided over the Contra scandal. Clinton suffered MonicaGate. Maybe he enjoyed it.
America could suddenly be challenged successfully, safely and violently. Modern day vandals blew up American soldiers in Beirut, Somalia and Saudi Arabia. USS Cole got a hole to prove it. US embassies in Africa were pulverized. Then along came the climax of 9/11. President Bush, a relatively harmless fool till then, turned into a viscous destructor of whatever claim American still had for greatness. Bin Laden won not only the battle but the war because Bush lost.
Al-Qaeda and Osama bin Laden won because America was and is lost. America didn’t pay attention. Not to the screams of terrorists. Not to the loss of that moral idealism that once was present. America was in the grips of greed. Riches were suddenly a right without the effort. America was lost to the Land of Oz where reality didn’t matter. Bush contributed greatly to the decline but you went along with it. Greed ruled the day.
Forty years ago, almost to the day, America went to the moon. “A great step for mankind” to be sure but the other shoe never dropped. 1969 marked the Woodstock Festival in upstate New York. That’s the good news. 1969 saw Richard Nixon take office, leading to Watergate and national disgrace. The Cleveland Plain Dealer published explicit photographs of dead villagers from the My Lai massacre in Vietnam, a practice still in place. The secret bombings of Cambodia began. The United States held its first draft lottery since WWII in to supply soldiers to Vietnam, where the 1969 war cost 163,000 dead. 9,414 were Americans.
In 1969, the Beatles gave their last public performance. AIDS arrived in the United States. James Earl Ray pleaded guilty to assassinating Martin Luther King Jr. Sirhan Sirhan admitted that he killed Robert F. Kennedy. 14 Chicago police officers shot to death Black Panther Party members Fred Hampton and Mark Clark in their sleep during a raid. Edward M. Kennedy’s Presidential hopes died with Mary Jo Kopechne as he drives off a bridge on his way home from a party on Chappaquiddick Island. Charles Manson and his cult murdered Sharon Tate and six others.
The late sixties and early seventies changed the world. The relative innocence of the fifties and the heroics of the forties faded away. The great social experiment of the sixties lost its teeth. The “I” generations of yuppies replaced the hippies and the protesters. Long hair was out, air blown was in. Universities spewed out MBA’s heading to Wall Street and lawyers moving in on Washington. Sit-ins, demonstrations and communes disappeared. The New Age and Prozac replaced Led Zeppelin and LSD. Dreams changed.
George and Dick
Most of us love to blame Bush for all things evil, but the Texas swaggerer wasn’t clever enough to create as massive a mess as we suffer today. The Bush regime thrived on a doctrine of Fear. Create Fear and you shall have Power. Plots here, WMD there, cut of the head off one or another enemy of something or another. Fear is a sickness, easily exploited. Bush and gang exploited fear to make possible outrageous and generally illegal policies. Fear of Muslims, such as Muslim limo drivers. Fear of non existing WMD. Fear of Central American nannies and Mexican gardeners. Fear of environmentalists, gays, actors, journalists and scientists.
Almost no one effectively challenged the crimes of a president or the corruption of his vice president. The deployment of hundreds of thousand soldiers into illegal wars met only scant opposition. Congress mumbled, the highest court fumbled and “the masses” stumbled. Human rights, international law and plain common decency gave way to greed, power frenzy and moral confusion. Bush did not create the financial meltdown. Neither did the elderly Bush, Reagan, Carter or Clinton. The crimes of George W. Bush are more about killing people than about impoverishing them.
The current news about George W. Bush, according to Google News, is not about Bush at all. The Rangers will name a suite after him. Laura Bush tells us about being out of the killing lime light – having to go to the hardware store – about borrowing chairs for dinner parties. Dubya picks up after Barney the Scot terrier on neighbor’s lawn. Score one for Barney. This is about the guy causing a million deaths according to authoritative sources. That is 1,000,000 deaths – six zeroes and a one.
Even today Cheney says: “I don’t believe we engaged in torture. If I had it to do it all over again, I would do exactly the same thing. I’d be just as tough and aggressive as I could to make certain that those individuals . . . who were prepared to kill thousands of Americans to achieve a political objective got what they had coming to them.” Good night, Cheney. Find another undisclosed location, please.
The stories about Dick Cheney mainly concern the possible prosecution of his (and his boss’s) war crimes over the last eight years. After all, sanctioning torture, ethnic cleansing and the like is quite illegal under US and International law. This most stubborn, selfish and scheming bastard in modern politics is trying for a foothold in the Republican power fraction of Palin, Limbaugh and, she wishes, Coulter. Bush allowed, but Cheney masterminded, the deaths of a million people – six zeroes and a one.
To date, the elderly Cheney’s comeback dreams haven’t come true but then; neither have those of Limbaugh and Palin. Out pops Liz Cheney, making the oddest remarks in public interviews. She seemed to claim, for instance, that Obama being born in Kenya should be stripped of the Presidency. Official records show Obama being born in Hawaii, then and presently not part of Kenya.
No question GOP in a crisis. With self destructive leaders such as those above, who needs democrats, feeble as they are. GOP has a long way to go. Having embraced marketing approach “selling a product”, the size, color and shape of that product is a well kept secret. No doubt making round pegs square overwhelms even the stoutest of designers, flying around the circus without a safety net. Moreover, the brightest of the GOP figured out, to their amazement, that Hispanics, black and young voters do not go GOP’s way at all. Now, all of those segments are growing at rates far exceeding the segment driving Cadillac with white walled tires. Unless the GOP can design the product speaking rap in Detroit, Spanish if Southern California and Greenspeak in Berkeley, they may never again reside over state dinners.
Many ask why the powerful elite allowed this mess to develop with so many common sense signs dancing in front of every one’s eyes. That’s a key question. How is the high up rot cut out? Smokey Bear, where are you?
What about the icon of financial genius, Alan Greenspan, and his 1987-2006 tenure of the Fed? The 2008 meltdown is a consequence of many of his policies. The dot-com disaster of 2000 taught him nothing as he allowed the housing bubble to develop. Greenspan believed a national decline in house prices would, could not happen. He kept interest rates low, fueling the subprime mortgages. Thereby criminally shortsighted, self-destructive and super ebullient gamblers in their mahogany corner offices could go for the home run to ruin the rest of us. These players were not all Wall Street insiders. Just about any bank or financial institution had fingers in the pie.
The nitroglycerin style derivatives markets took off during Greenspan’s watch. Derivatives grew by 1,000 percent in the past decade and now represents a contract value of 4 (four) times the combined wealth of this planet. Any sane person should scream and run like hell for that old A-bomb shelter. Suppose you have a $400,000 house and a $100,000 retirement fund. Use it as the down payment towards $2,000,000 worth of lottery tickets, due in a week. Perhaps you’ll win. Most likely, you’ll be $1,500,000 in the red. Even your cat will hate you.
Such was the gamble of AIG, suddenly requiring $85 billion of your money. Shortly before, Fannie Mae and Freddie Mac disasters robbed you of $238 billion or so. Société Générale, Amaranth Advisors, BAWAG, CITIC Pacific, Groupe Caisse d’Epargne, WestLB, Sadia, MF Global, Morgan Stanley and Carnegie Investment Bank all found out high risk trading can end up as billion dollar eggs on one’s face.
Greenspan retired in 2006 and others took over. The new Fed chairman Ben S. Bernanke found the ship to be sinking and frantically started bailing. He and a few associates tried to plug the creaking hull as one torpedo after another drove in, while being “overwhelmed, exhausted, beseeched, besieged, constantly second-guessed”. The pivotal event of Lehman Brothers crashing on September 14, 2008 finally exposed the dirty laundry to a confused, alarmed and panicking world. Lending froze, and the world economy sank like a rock with fortunes vanishing like yesterday’s meringues.
Bush was an uninvolved spectator to the potentially biggest loss of American prosperity in history. Concerned only with avoiding blame, he obsessed about teaching Wall Street a lesson for troubling him. His White House staff was looking for new jobs, gleefully pushing what they could into Obama’s lap.
Greenspan, Bernanke, Bush, million buck Bonus Bankers or Stone Age Detroit Big Shots may all be confused about which century they live in and whose wallet they so carelessly throw around. They collectively contributed to you and me down financial and moral black holes. But you are the one walking up to the rim of that hole.
Then who else might we blame? What gruesome faults are we trying to pin on some one? To many a common man or woman, the ghost story is about a job that disappeared. Others lost their house. Owners of selected stock and fund assets are wiped out. Owners of SAAB cars may or may not be screwed but trading in your ’77 Saab 99 for a brand new Koenigsegg super car won’t be easy.
Disgraced CEO’s, CFO’s, Presidents, Secretaries, Ministers and other dignitaries might be in jail or living in the Manhattan Subway tunnels or beach front Malibu by now. No question, scores of rats are leaving the ship, voluntarily or not. Heads are chopped off, tumors removed and bad breath cured.
Who else? Rounding up the usual suspect doesn’t do the job either: Can we blame Terrorists, Columbian drug lords, Philip Morris, the Russian Mafia, Japanese “research” whalers or even Ann Coulter? Sorry, they are not exclusively to blame. Saudi royalty, Oprah, abortionists, Dr. No, North Korean Great Leaders, Noble Sons and Glorious Fathers are likewise unable to claim all the glory.
The International Communist Conspiracy is more concerned with Ensure and Attend than with toppling democracy. The Armenian International Conspiracy only exists in the brain of a madman, thus probably not guilty. Google, Bing or even Wikipedia do not provide the unsavory answers. The Vast Right Wing Conspiracy, the New World Order, CIA, the Military-Industrial Complex may have a lot to answer to, but perhaps not in this particular case. The Area 51/Grey Aliens conspiracy and OJ are certainly suspects if just someone could pin down why. Bigfoot and the Protocols of the Elders of Zion nowadays seem to be lost, thus are off the list.
The real enemy includes you and me. We bought houses, then refinanced as prices went through the roof. We merrily bought Hummers with the windfall. We were temporarily rich, buying stocks such as InfoSpace, The Learning Company, Lycos, Flooz.com, Boxman AB, Netscape, Pets.com, theGlobe.com and, yes, Microsoft. All were hot shots around 1999, but are not so hot today. Fortunately for many, those losses were covered by house prices continued to boom. It was great fun while it lasted.
Tale of the Sand
Here are some clues. First, we all knew the policies of Bush were dead wrong. Oh yes, you did, but you didn’t really care. Second, didn’t your mother tell you about borrowing a lot more than you can afford against your home, for Christ sake? Third, to paraphrase Obama, the remarkable balloon of wealth was a mirage similar to that of houses built on sand. Eventually, sand will shift, toppling the house, no matter how many lines in the sand someone hangs their hat on. Migration to houses built on solid rock will be painful, long and full of sacrifice. Eat your broccoli. Pay for the bailouts. Smile bravely.
That tale of the shifting sands is a great metaphor except it in no way addresses the issue. That is, “why did this black hole exist in the first place and is it by chance repaired, filled in and plugged tight”? Never mind plugging holes, the Obama metaphor justifies massive government intervention in the opinion of Democrats. According to Republicans, let the Great Father in the sky work his magic for those of the right credentials, i.e. registered Republicans and hell with the others and let’s not rob the rich of their hard earned windfalls. If the Great Father drags his heels, there is always Sarah Palin to do the honors.
Enter trillion dollar programs to “reach high ground, “to rebuild on solid rock”, to “revive America”, to revive “Reelection Chances” and to “Paint Lisbon, ND, Pink”. We all know this is just a mad gambling streak. No matter how many trillions are thrown out the windows like a New York confetti parade, it’s not going to save the day. Those trillions are a continuation of what was, and is, wrong in the first place. Why expect change if all you do is to repeat the past? If your kid ate too much candy, do you give him/her more candy? If you are on life support, will twice as much life support cure you or kill you? As Obama advisors put it, “we are not soothsayers”.
In fact, we are approaching six months of bailouts with no evidence of any positive effect. Obama begs for patience, claiming fall will be glorious. Which fall is that? Obama’s spin machine is the mightiest ever in the annals of American politics. Not even that machine can cover up tens of trillions in deficits is bad news to any sane person except a few Voodoo economists. Just ask mother.
The Conservative in you will say “Nothing wrong here, that’s the way the buck rolls”. Your Socialist ego says “Shoot the bastards and let’s split the cake”. You Commies will relocate everyone except the chosen few to Prudhoe Bay to learn farming, thereby eliminating greed and providing food for starving auto workers and poverty ridden airline crews having only peanuts to eat. Democrats will remain confused, requiring endless debates and another trillion to make ends meet while waiting for The Answer. Ralph Nader, Ross Perot, Rod Blagojevich, David Duke, Ann Coulter and Ralph Reed all have ideas about what should be our future pads. Fortunately, few agree.
Throwing a red hot trillion bucks at creepy bankers and Detroit mammoths, building bridges (over what?) and new roads (to where?), closing an American concentration camp or two, stopping some torture, possibly embracing a few friendly Muslims, executing tax cuts and providing health care for every one – sounds good but is it real, enough or even wise?
This is the first in a essay series on current events, attempting to understand why so many wrongs over the last decade has met with so little concern, protest and anger. The world of today with its instant, massive and global coverage of important as well as unimportant issues makes it very hard to distinguish between hype, hymn and heroics.
And that’s the way it is