First, I'm sorry to post this piece here, but your topic presents a perfect fit for this essay I wrote this afternoon, and I don't yet have posting rights on du. I registered to post on du after I found my works quoted, I mean linked here, so, I signed up. You guys are pretty cool, so all's I have to say about our economic situation is,..
To put it simply, NO, we have not yet begun to measure the deep end of the economic hole we have dug for ourselves. Not in the least. The upward moves we have recently been seeing in the financial/equity markets are not a real financial/market recovery, but a government-generated financial market bounce. It is a financial mirage over an economic desert.
The Basis of the Recent Market Bounce
This current market bounce did not eminate from the repair and restoration of market fundamentals, but from the US government's promise to completely protect the power, wealth, profits, and most importantly, the dominant financial position of the biggest banks in the United States.
The markets are bouncing because the Obama government just told all the banks, as did the Bush Admin before, that the citizens of this country would bear the costs of the Bank's massive losses. And the insurance companies. And Freddie and Fannie.
The Wall Street Bank's massive bribes to both of the parties have assured that the banks will retain command of the US financial system, which signals that they have also retained political control of the financial policies of our country, even after they have systamatically defrauded, drained, and pushed both the markets and the economy over the brink of failure. The first failure was that of our democratic form, the second failure was our like-corrupted economy.
Be very clear about the fact that these massive bank bailouts have not eliminated the banking/credit problem at all, but are aiming at merely transferring the problem's location from Wall Street to the Government to Main Street.
The Crisis started in politics, infected credit and housing, went Economic, and will go Monetary
In <a href="http://nextrevolution.org/node/49">December of '08</a> I predicted that the markets would fall from the 8000 level to the 6000 level. This marked the transition of the crisis from banking and credit markets to the broad economy.
On <a href=
http://nextrevolution.org/node/63#inflation>March 6th of '09</a> I predicted that economic fundamentals, combined with China's national interests, would combine to bring on hyperinflation in the dollar.
Since then the treasury started <a href=
http://committeefordemocracy.org/fp/index3-28-09.html#boondoggle>printing money</a> to buy US Treasury Bonds. These actions came only days after Priemer Wen gave a warning about <a href=
http://committeefordemocracy.org/fp/index3-16-09.html#china>China's relationship with US debt markets.</a> The Treasury printing money to buy our own debt dropped the value of all dollar-denominated assets by 4%. This was a clear message to China, and the rest of the world, that the value of US assets would be flexable, to say the very least.
In any case, if you were not sure, all of these Fed/Treasury actions are desperate attempts to stimulate the economy by cheapening the value of the dollar after already lowering interest rates to zero, and taking on public liability for every major banking and Insurance industry loss. These are the acts of Zimbawai and inter-war Germany.
This approach, "stimulating" the drained, indebted "consumer" (citizen?) by flooding the failed providers of credit with trillions of imaginary dollars assures that the trajectory of this crisis will soon become monetary, as predicted.
The Social Costs and The Political Roots of The Crisis
The government's assumption of the bank's liabilities will ultimatly be passed on to our citizens through higher taxes, massive inflation, and, if you can believe it possible, even worse educational, medical, and social services than we already have.
All of this damage to our country was made possible courtsey of the massive bribes Wall Street and our Corporate Elite has showered upon our Corporate-Dominated Political Parties and their throughly corrupted politicians.
The power to destroy our economy was purchased at the cost of destroying our democracy and making participation in the farce of politics disgracfull for honorable people. But the returns for corrupting our democracy are substantial, apparently sufficient to offset the cost of betraying our democratic principals.
Through these massive bailouts Wall Street's ownership of Washington's Politicians has revealed itself, and the overwhelming power of corporate bribery to run our government flexed its mighty muscles once again.
The markets recent rise is based on no more than the perceived reality that the bank's political clout will assure that their debts will be shouldered by the public treasury.
How we Got Here, and where "Here" is
The high market position, the 14,000 point on the Dow, and the "here," the 8000 level to where the banks, credit markets, and subsequently the economy fell to are best described as deeply interrelated positions, comprising a pre-determined relationship really, much like a doctor's knee-jerk reflex test, but within a long-term parasitic political/economic process, rather than as specific unrelated points in time and space within the body politic.
The Corporate politicians and media are telling us that we are merely experiencing a housing, credit, and banking crisis that collapsed the economy, and it needs to be repaired. Fix the problem, and markets will again begin flying upward to and through the 14,000 level. Fixing the banks will therefore fix the problem, and the value of everything will again move relentlessly upward. That is an out and out lie.
We are facing the complete failure of Capitalism as a political form, and the failure of material wealth as THE fundamental metric of social and political success.
It is now becoming apparent that maintaining our political system's integrity provides greater returns for more people than abandoning them, as the politicians and their corporate sponsors have insisted.
The fact is that Greed pays off big-time in the short-term, but Greed extracts massive costs in the long-term to pay dearly for the relatively meagre short-term gains.
But, as long as those who benefit in the short-term are not those who pay over the long term, our politicians will earn bigger bribes every election cycle.
Economically, what we are really experiencing is the exposure of the fact that the very process of American wealth creation is no less a fraud than the fraud that the US is a democracy. They are in fact related frauds.
American Wealth Creation is nothing short of the greatest Ponzi Scheme in recorded history.
The "Wealth" of Our Nation
The wealth and profits of American corporations and the Wall Street banks is not the same as the wealth of our nation.
Unfortunately, The wealth of our nation has been mistaken for the profits of our Corporations and Wall Street banks.
This has become a real problem because Corporate and Wall Street profits have not been even remotely based on the productivity of our economy or the wealth and earning power of our citizens, but have been based on the extraction of massive corporate and Wall Street profits from an economy, and individual citizens, that have been going deeper and deeper into unsustainable, and unsupportable debt.
The massive Corporate/Wall Street profits were not the product of healthy economic activity, but were actually made by damaging the economic health of each of our average citizens, and our whole economy. In fact, our Corporations, our Banks, and Wall Street have all based their profits on draining our country of its fundamental economic health.
The profits and wealth that fueled the last 15 year's frenzy of corporate greed and speculation was the product of a process that generating massive private profits by creating a massive national indebtedness, and a radically unbalanced the distribution of our national wealth to a point that is historically unprecedented, in this, the country that invented the Robber Barons.
This massive national indebtedness and the parallel impoverishment of our working classes is the product of a 35 year massive demographic expansison designed and operated to strip the American Middle-Classes of their wealth, their political democracy, and their social infrastructure, which has ultimatly robbed them of their rights, and the responsibilities incured with American citizenship.
Our massive demographic expansion based on crimigrants and irresponsible growth has been designed and operated to drive wages down while driving the costs of commodities up, while simultaneously providing the space for a critical underfunding our engines of equality, our medical, educational, and social infrastructures to exist and supercharge the profits of our corporate aristocracy.
The process is quite simple: apply supply and demand principals to domestic labor and domestic commodities.
Flooding the labor market with illegal labor removed the earning power of the American middle-class. Flooding the country with millions of crimigrant "consumers" has driven the price of every commodity, from rent to food to housing upward.
The crushing of wages combined with the radical rise in living expences for our middle-class has radically changed the distribution of wealth in our nation.
This alteration in the distribution of wealth has been reflected by the alteration in the distribution of political power.
As our corporations sucked the wealth out of our nation they invested enough of this stolen wealth into politics to completely detax, deregulate, and de-democratize our country.
Corporate control of politics also allowed the corporations to pocket as profits the funds that should have been spent to pay the costs of doing buisness.
The expencses required to maintain our medical, educational, and social infrastructures were pocketed as pure profit.
What the Bailouts are desigend to Do
The Bailouts are designed to preserve the process that has drained our country of its democracy, its wealth, and our rights.
The Bailouts are the Mutual efforts by Both Corporate Parties to preserve the process of Corporate robbery which already failed, and has impoverished our people while knocking our markets and economy to their back. The process of bribery, bailouts, and earmarks has already made a mockery of our Democratic Republic.
All of the bailouts are soley designed to perpetuate the corrupt system that moves the majority of the wealth of our nation out of our individual citizen's hands, and into the coffers of corporate America, where our stolen wealth is managed by Wall Street's Bankers.
Wall Street then magically multiplied our stolen wealth through derivitives, and loaned our stolen wealth back to us at loan shark rates
This is the process that the bailouts are trying, but failing to preserve. The reason is quite simple: our national debt had already exceeded the ability of the world to fund, before the bailouts were even a gleam in Wall Street's greedy, beady eyes. This system already failed and collapsed upon its own internal financial flaws, not to mention its political failure to preserve our democratic forms an values.
This system of political and economic corruption is an insult to our Constitution, a gross distortion of our most fundamental political values, and has led to significant breakdowns in every aspect of American life, not just in our economy and markets.
The fundamental situation we are facing is that we are confronting the consequences of having been robbed of our most fundamental rights, and then our national wealth, by the crooked process that both parties' bailouts are struggling to preserve.
The bailouts are going to fail to restore the world's confidence that the United States financial markets can continue to dominate the world economy while our national economy is going deeper and deeper into un-payable debt.
Our path out of this mess is quite clear: We must restore the rights and responsibilities of our citizens, reestablish our democratic forms and our democratic republic, restore the duty of our government to regulate public comerece while protecting every citizen's private rights, then we can actually rebalance our economy, restore our public infrastructure, and enjoy life's beauties, rather than the problems we create.
But we have a lot of hard work to do before we get there. The next major obstacle we are going to face is going to be monetary. By June of this year the dollar is going to lose a significant percentage of its value, and I believe that hyperinflation will be rolling up by October.
Background
<a href=
http://committeefordemocracy.org/Corruption_Updates_133.html#c6>august 17, 2007:</a> <strong>Housing-credit crisis exposing the rotten core of American Markets and Economy</strong>
Views of the political economy that may interest you
<a href=
http://committeefordemocracy.org/Corruption_Updates_108.html#econessays>All economic analysis</a>
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