Kunstler "We mortgaged our future and the future has now begun"

[Strelnikov_]

http://jameshowardkunstler.typepad.com/clusterfuck_nation/

Even while a wave of reflex nausea washed over America last week, and the unemployment rolls swelled by much
more than another half million, the greatest stock market suckers' rally in seventy years pulled in the last of
the credulous. These are strange days. The earth is heaving and the buds swelling again -- at least north of the equator, where most of the action is -- and the global economy, which was supposed to be a permanent new add-on to the human condition, is sloughing away in big horrid gobs. But no one in charge of anything can believe it. The banking fiasco has introduced so much noise into the system that world leadership can't think straight.

. . .

The US is doing everything possible to avoid these awful realities, but probably the worst self-deception is the idea that everything would be okay if we could just "re-start lending." That's just not going to happen. There is no more capacity to service the debt we've already piled on. Americans borrowed too much, and the bankers who made obscene fortunes in fees and bonuses in fraudulent lending managed to leverage this unpayable debt into the greatest collective swindle the world has ever known. The swindle has sent poison into every cell of the macro socio-economic organism, and further swindles are unlikely to revive it.

. . .

President Obama will have to starkly change his current game plan if this outcome is to be avoided. I think he's capable of turning off the mob -- of preventing the grasshoppers from turning into ravening locusts -- but it may take an extraordinary exercise in authority to do it, such as the true (not pretend) nationalization of the big banks, engineering the exit of Ben Bernanke from the Federal Reserve, sucking up the ignominy of having to replace failed regulator Tim Geithner in the Treasury Department, and calling out the dogs of the swindlers who had the gall to play their country for a sucker.

As I've averred more than a few times in this space before, the standard of living in America has got to come way down. We mortgaged our future and the future has now begun. Tough noogies for us. But the broad public won't accept the reality of this as long as the grandees of finance and their myrmidons appear to still enjoy the high life. They've got to be brought down hard, perhaps even disgraced and humiliated in the courts, and certainly parted from some of their fortunes -- if only in lawyer's fees. Mr. Obama pretty much served notice to this effect last week, telling a delegation of bankers in the White House that he was the only thing standing between them and "the pitchforks." It's possible he understands the situation.


Commentary:

While I do not agree that financial collapse and riot are close at hand (the current game can probably run out much longer than he predicts) I feel he makes some good points on how we arrived at this juncture, and the futility of trying to reboot a system with no future.

That said, I understand why Obama is pursuing his current course regarding the 'economy'. Until there is a consensus among at a minimum Congressional Democrats (and therefore the public) that the system has to be redesigned, he is limited to trying to patch the current program. He is a status-quo centrist, but I do believe that he has the intelligence and political IQ to know when it is time to begin building anew.

Whether there will be time to rebuild once the public (and therefore politicians) come to this realization is another question . .

[cliffordu]

1. Jimmy has some real interesting thoughts on all this stuff....

[Terry in Austin]

2. Pitchforks

Kunstler also mentions this:

Mr. Obama pretty much served notice to this effect last week, telling a delegation of bankers in the White House that he was the only thing standing between them and "the pitchforks."

Did Obama really phrase it this way? Anybody know what the story is?

[Speck Tater]

3. This is what he said...

...
"'These are complicated companies,' one CEO said. Offered another: 'We're competing for talent on an international market.'

"But President Barack Obama wasn't in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public's reaction to such explanations. 'Be careful how you make those statements, gentlemen. The public isn't buying that.'

"'My administration,' the president added, 'is the only thing between you and the pitchforks.'"
...

http://www.associatedcontent.com/article/1623056/barack_obama_pitchforks_and_tea_parties.html

[Terry in Austin]

5. Thanks...

Wow, huh?

[Terry in Austin]

4. GIMF

Apparently, it was Politico (*ahem*) that first broke the story, saying "The fresh details of the meeting — some never before revealed — come from an account provided to POLITICO by one of the participants."

Here's what they report:

the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.

“These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.”

But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”

“My administration,” the president added, “is the only thing between you and the pitchforks.”