From the bailouts of Wall Street to the consumer madness of Main Street, from the top downwards we have witnessed what can only be described as a complete vacuum of ethics- fuelled by an unprecedented orgy of cash and institutional credit.
Somewhere along the line, America stopped making products for money and Wall Street started to make money its product. Yes, unregulated derivatives, hedge funds and subprime portfolios. And trillion dollar bailouts. And for Joe Six-pack? Well, he gets unbeatable deals on LCD screens at Wallmart and a free hotdog.
Meanwhile, Main Street heads for the malls. In the run-up to Christmas- like clockwork, major US media pundits and their Washington counterparts are canvassing for manic consumers to get out there and support the ‘surge’… in this case, the “shopping surge”. The annual cure for all market ills.
Black Friday is the first shopping day after Thanksgiving which has served as the unofficial beginning of the Christmas season- or the “Christmas shopping season”(more and more it’s becoming increasingly impossible to tell the difference).
This year, “Black Friday” really earned its name in the darker chapters of American folklore as a worker at Wal-Mart in New York state was trampled to death by shoppers who broke through the store's glass doors minutes before the store's scheduled opening at 5:00 am. In addition a pregnant mother was hospitalized from injuries in the same "stampede". Irate shoppers in check-out lines apparently protested when authorities tried to close the store so that emergency services could do their job. Hark! The state of the union.
From the top down: An orgy of credit.
A separate event at Toys R Us in Palm Desert, California saw two people shoot and kill each other after an argument, possibly over merchandise. Shots rang out inside causing shoppers at the busy store to scramble for cover. Yet another Tarantino-retail scenario, fuelled no doubt by purses and wallets full of plastic cards.
Whether it’s the credit crunch or the retail crunch, come January, eyes will be on Obama and his venerable new ‘team’ of economic advisors to improve this picture, but on paper their stated agenda is almost identical to the Bush Administration’s plus a bit more domestic spending.
Still, there is no investigation from the media pundits and thus, a electorate without a clue as to how our government actually intends to pay for all this. Talking heads and voters are simply too preoccupied with upcoming Christmas shopping statistics- figures which almost certainly will validate the outgoing President Bush’s recent, albeit belated, admission that we are officially in a recession. Better late than never, good ole Dubya.
Borrow and Spend
The typical American consumer’s micro-economic mentality of ‘borrow and spend’ merely reflects the gospel of Washington’s own macro-economic policy. Many honest financial experts are saying that this same borrow and spend philosophy has gotten the US government and America into the position it is today, namely, running an annual, compounded deficit of anywhere between $800 billion and $1.5 trillion- per year. The exact figure quoted depends on which set of books Washington is presenting us with.
The October Bailout Bill did not cure the markets. It was, after all, a bailout which both George W. Bush and Barrack Obama lobbied heavily for. Neither uttered a word about how we could actually balance our budget against such generous hand-outs to the banksters. This key point still seems to be off limits.
What about the supposed economic benefits of the bailout? So far, America's reward for passing this bailout has been a diving stock market, higher interest rates, reduced lending, devaluation of the dollar and more exposure for these banks, which means more bailouts to come.
Top financial analyst Peter Schiff, President of Euro Pacific Capital, outlined America’s dilemma in a Dec. 4th 2008 interview with CNN. Schiff explains, “We (the US) don’t have any money, we need the world to lend us this money. We need the Chinese, we need the Japanese to lend us the money- that we can’t pay back.”
A dose of reality for sure, but is Schiff's cry falling on deaf ears? Are Washington and America too entrenched in this fiat money system to listen to common sense? Outstanding derivatives, according to the Bank of International Settlements, is more than $500 trillion. A lot of folks got rich off this unregulated Wall Street Vegas game, but it will be at all of our expense. With this level of fake economy looming over our heads, a global collapse is imminent. The likes of Goldman Sachs and the AIG are simply hoarding cash that they have received through Henry Paulson's T.A.R.P scam. Like it or not, it's the financial crime of the millennium.
So what about Obama’s rescue plan? He is now talking about a new $700 billion or perhaps a trillion dollar “stimulus package”(a less-than-brilliant tactic already employeed by Bush the Younger). Mind you, it wouldn't be bad if it bothered Americans slightly, that nowhere in any of these grand economic plans does Obama- or his neoliberal supergroup of advisors, mention how on earth the United States of America is going to repay all of this new money.