"We are experiencing among our clients an awakening that the United States is in big trouble," said Erik Nielsen, chief Europe economist at Goldman Sachs.
What triggers the the ups and downs of a nation's economy? Are the "up" periods a sign that government, industry and bankers are doing a good job, putting sound policies in place and being good stewards of the nation's finances?
Well, those in charge during the good times sure don't miss an opportunity to claim just that kind of credit.
I used to work for a guy like that. When things were going well he was all about "what a great job we're doing." When things went terribly wrong though he wasn't interested in finding out why. Then the message was, "Now, now Steve, it's not about blame."
I never bought it. (And, BTW, the company can now be viewed in the files of the federal bankruptcy court, for which no one was to blame, of course.) Personally I always figured that credit and blame are opposite sides of the same coin. That you can't have one and while being immune from the other.
How do I know? Because someone with half a brain did see it coming -- me. Let me be clear, I am not the sharpest pencil in the box -- never have been. And that's not false modesty either. And I have the old report cards to prove it. (I have one enduring memory of my high school algebra teacher, Father Andre, staying after class to try to help me understand algebra 101. Twenty minutes later he was lightly thumping his forehead against the blackboard muttering, "Leave, just leave, please, go, now....")
I digress. Despite being saddled which such a cognative handicap, way back in December 2002 even I could see where Bush's Reaganomics redux was heading, and I can prove that too. I wrote the following in an article for the Sunday San Francisco Chronicle:
One might think such a dismal batting average would sober up even the most rabid fiscal jihadist. On the contrary -- even though a recent New York Times/CBS News poll shows that two-thirds of the country thinks the money from the now-vanished federal surplus should have been used to help save Medicare and Social Security, not subsidize a trillion-dollar tax cut -- conservatives see their historic mid-term victory last month as a mandate to finish the job.
What about the expensive failures of the past? Conservatives say the only reason things went badly was that liberals gummed up the works, first by snookering George H.W. Bush into breaking his no-new-taxes pledge (he raised them in 1990), and then by aiding and abetting Clinton during his eight-year reign.
Ah, but wait, there's more. Then, like medieval monarchs of 12th century Christendom, they reached into the national treasury for hundreds of billions more to fund bloody wars against Islamic nations far, far from home. And when that money ran out they mortgaged their kingdom's future to fight on.
Had they simply stuck with the whole crony capitalism thing the economy would have eventually weakened from blood loss and toxic levels of corruption. And it would have slipped into recession. But to throw a war of choice in on top of that, well, that's a lot of "sh*t happening," even for the US of A. Now we are heading for something worse than just recession and inflation (stagflation.) Just where we're headed is anyone's guess. Only the direction is known, and it's down.