Posted on 05/16/2009 5:56:38 PM PDT by Lazamataz
You asked a question last year around this time as it related to the risk of banking system collapse; something to the effect of “So rioting in the streets, neighbor killing neighbor, that sort of thing?”
I replied to you that we were “not there yet or anytime soon”. I will revise that to 2014 — unless a lot of things go right, which does’nt seem to be happening. As an example: People are reacting to the uncertainty within the economy by being smart — paying off debt where they can, not spending on luxury items, being a lot smarter with their spending than they have since I was a kid. Smart behavior individually, but when a lot of people all do that at the same time, bad news...
The problem with this behavior on a macro level is that huge chunks of our economy rest on a foundation of stupid and frivolous spending in the last 30 years and that has been put on hold indefinately. We still have not seen the end of the ripples that the near collapse of the financial system started last year. If it can play out in 3 years that we are getting people back to work, buying houses, and taking vacations again, than we will not have a breakdown like this guys talks about. But if things even get gradually worse for the next five years, all bets are off. We do have a nice national canary in the coal mine for this projection — watch California.
None of us are going to like how any of this goes. No government? Not a bad idea - until we get a taste of what it’s like to shoulder all of the responsibilities that we’ve gotten so used to handing off to someone else.
For a whole lot of people, that’s going to be a very nasty shock.
A whole lot of people won’t survive it.
BTTT ... you would post this on Saturday night. I intend on reading it all ... tomorrow.
And the distinction someone once made between Russian and American attitudes about success:
American: "My neighbor bought a handsome new horse. I want a horse just like his."
Russian: "My neighbor bought a handsome new horse. I hope his horse dies."
Prescient, but dark, very dark, but still very prescient. The author has put into words what has been on my mind for a long time but was afraid to express.
Mark
Perhaps PowerPoint is the key to soothing a ZOMBIE horde.
Excellent article.
May Obama’s bones be cursed in He11.
My high-school German teacher was former Luftwaffe aircrew whose Heinkel bomber was shot down during the Battle of Britain (he was a top gunner and lost part of a hand to the Spitfire that claimed his bomber). He was grateful to be alive, and living in the States moreover, and the thing about American life he commented on as having always amazed him was the spontaneity and thoroughness with which Americans organize themselves for a desired activity -- as exemplified by high-school bands. He told us our 80- or 90-musician band, and all the high-school marching bands he'd seen in Louisiana, were far better than even traditional European bands, and were in fact objectively ratable as crack outfits thanks to their gung-ho attitude and frequent practices. He said he saw the same thing over and over in social groups formed for all purposes -- Hi-Y and 4-H, FFA, the Chamber and Jaycees, Key Clubs and Rotarians, you name it.
The German guy got it. The Russian one, doesn't yet. But that's okay.
So what did you decide?
I decided I must be out of my mind to have read something Laz posted....
"Texas" isn't talking secession -- its governor is trolling for conservative votes because he's squaring off with a more-competent RiNO than he is for election next year.
Conservative votes, I might add, that he doesn't deserve based on his record and certain "lifestyle" issues of his own.
As for the 10th Amendment, the Ninth and 10th Amendments were intended to serve as baffles against federal government becoming "central" government, which latter concept is obviously the one this Russian is most comfortable with, based on his own experience.
Relationship-seeking for federal patronage conduits with individual voters was a hallmark of FDR's New Deal and LBJ's Great Society politics. It needs to be undone for many reasons, some of which this Russian refers to -- the tendency of local eleemosynary and civic-boosterism resources to atrophy in the face of rivers of federally-directed political patronage dollars, for example. (Ee.g.: federal welfare, federal revenue-sharing, Medicare and Social Security, Obama's "Soviet medicine" proposals, Head Start child-minding (federal nanny-state, literally!), HUD Chapter 8 housing programs, No Child Left Behind, and so on.)
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Thanks for the post. Ping for later examination.
Thanks for the read. More lite Saturday nite reading...
And boiled. Don't forget to boil and take the bay leaf out!
Right out of the book........glad to see ya back around here !
Stay safe !
I’ve always thought that the validity of an argument is inversely proportional to the number of words used to make the argument.
Laz, the author has got it wrong. The economy is correcting a fundamental problem: global oversupply.
The planet makes too many cars...excess manufacturing capacity.
There are 19 million vacant homes in the U.S. alone...surplus housing capacity.
There are too many shopping malls. Overcapacity.
There are too many cargo ships. There is too much office space (14% vacancy rates in the U.S. alone).
For centuries B-schools have been insisting that the path to prosperity was to “make things,” but not once did schools or the news media mention what would happen if we had too many factories, too many offices, too many homes...global overcapacity.
And finally, the world made too much. The camel’s back was broken.
Think about it. 19 million vacant homes. Do you want to go build a house “on spec” for an investment right now?
That would be pretty suicidal.
Do you want to build a new automobile factory? No. Again, that would be financial folly.
Well, that’s the state of the entire planet right now.
And the Market responds to that excess capacity with deflation.
Prices fall.
Shipping prices, for example. Phenomenal numbers of giant new ships have been built. Last year the shipping rate for oil on a supertanker from Saudi Arabia to Japan cost $177,000 per day. Today, the shipping rate is $16,000.
Enormous deflation.
At the high end, the Ferrari Premium is gone. There’s no more waiting list to buy a prancing horse, and no more “above sticker” pricing.
At the low end, the Smart Car is being discounted 27%.
Deflation.
Insurance rates are down. Deflation.
Computer prices are down. Deflation.
Cell phones are cheaper, and cell phone service is less. Deflation.
Oil has fallen from $147 / barrel last year down to the $50’s today. Deflation.
Massive credit contraction. Massive debt destruction. Massive wealth losses. Massive asset price drops.
Boats are cheaper. Planes are cheaper. Motorcycles are cheaper. 4Wheelers are cheaper. Homes are cheaper. Stocks are cheaper. Salaries are down. Wages are down. Hours are down. Overtime is down. Bonuses are down.
Deflation.
And we will have deflation until the excess capacity is removed from the economy.
Doesn’t matter if governments fight the above; it’s inevitable. It can be delayed, not stopped.
And that’s not going to bring down our government. Mugabe is still in power in Zimbabwe. Governments don’t fall easily.
And cultures survive long after governments fall. Japan’s government lost WW2 and still maintains its distinct culture.
The loss of easy credit and the loss of easy money real-estate and stock/bond schemes will happen, of course, but they will happen as part of the Market’s response to global overcapacity...not due to cultures or governments falling.
And yes, the public will return to the basics instead of returning to escalating the keepupwiththeJones’s wars.
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