The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Wednesday, February 3, 2010

Obama Hitches a ride on Volcker's Vagon.

Since I couldn't put it better myself, I thought I'd use Clive Crook's logic (yes, a financial reporter who's name's Crook ... who says there's no irony left?):

"Suppose Goldman Sachs were to comply with the Volcker rule by relinquishing its bank status (which it adopted after the crisis was upon us, with the authorities' blessing, to avail itself of the full range of assistance). When the next crisis comes round, would the Treasury be able to let Goldman fail? The Lehman experience answers the question. Lehman was not a commercial bank. If Goldman, having reverted to non-"bank" status, could not be allowed to fail, what would the Volcker rule have achieved?"

Precisely. Even as President Obama mouthed the terms of the so-called "Volcker Rule", the obvious uselessness of it, to anyone who followed the shenanigans at Treasury and the Fed during the denouement of Le Debacle could clearly see, it was nothing, did nothing, changed .... absolutely ... Nothing. As stated in the preceding paragraph, Goldman Sacks America was already a non-bank, they changed its status specifically so that they could inject taxpayer funds and put the American taxpayer and the US's Sovereign credit-rating at risk and then to underwrite the outsize bonuses and salaries that the executives at Goldman's had, yes, literally Sacked, leaving the Company without the necessary capital base to adequately cover their insatiable greed-driven speculative bets.

And now with a nod and a wink, the President stands in front of the country and purports to indemnify the system against a recurrence of the crisis by doing no more than putting us back to the situation where these sharks can again run free to maul and savage the financial system for their own aggrandizement while simultaneously debauching the very system on which their feeding frenzy depends. This is the height of cynicism, as it depends, not only on the government simply pretending it's doing something, but on the reliance on an utterly stupid electorate.

It does for the financial "industry" what stumblebum Benron Bernanke's doing over at the Fed for the housing industry: propping up a failed Ponzi scheme to re-energize profits so as to enhance federal revenues (all those bonuses are most assuredly NOT tax-deductible).

In Charles Dickens' "Martin Chuzzlewit", when called upon to paint the American Eagle and asked how he would do so, responds, "I should draw it like a bat for its short-sightedness, like a bantam for its bragging, like a magpie for its honesty, like a peacock for its vanity, like an ostrich for its putting its head in the mud and thinking nobody sees it....

....and like a phoenix for its power of springing from the ashes of its faults and vices and soaring up anew into the sky!"

But right now our Phoenix is teetering on the brink of insolvency, like so many other municipalities and States in the country, who also depended on constantly growing tax revenues from property owners who overpaid for houses they were assured would keep going up in price. Government on every level, as well as businesses, shamelessly betrayed the American people in order to pad their own pockets. This is the paradigm which Obama's desperately trying to resusitate. The only place tieing us to Volcker's Vagon will get us is Barrack to the Future.

Tuesday, February 2, 2010

War: The American Way of Life That's not Negotiable.

The U.S. Senate has voted to raise America’s statutory debt ceiling to $14.3 trillion. The national debt now equals the GDP, and is growing at a much faster pace. This will force the Treasury to borrow more money to both service existing debt and pay for this year’s $1.3 trillion annual deficit. With Ben Bernanke confirmed for another four-year term as destroyer-in-chief of the U.S. dollar, the plan of the Maestro is apparent by looking through "The Eyes of Laura Wiemar":

Adapted From Richard Hughes, "The Fox in the Attic": (italics mine)

Consumption has always to be paid for. Their War has been very conspicuous consumption but there has been virtually no war-taxation to pay for it on the nail. Thus there was nothing really mysterious about this present exhaustion into outer space of every last cent's worth of new value as fast as it was created: this was a kind of natural, belated capital-cum-income levy - though levied now not equitably by any human governance but blindly, by the Market itself. Of this rationale however the sufferers had no inkling. They could not understand their suffering, and inexplicable suffering turns to hatred. But hatred cannot remain objectless: such hatred precipitates its own THEY, its own someone-to-be-hated. In a hell devoid of real ministering devils the damned invent them rather than accept that their only tormentors are themselves and soon these suffering people will see everywhere such devils, consciously tormenting them: Jews, Communists, Capitalists, Catholics, Cabbalists, Homosexuals - even their own elected government. Millions of horsepower of hatred have been generated, more hatred than the real situation could consume: inevitably it'll conjure its own Enemy out of thin air.

The author's writing about Germany between the Wars. This is what "The Maestro" Greedsphan (a la Pitt in England during the first American Civil War, also known as The Revolutionary War) and GW conjured up. The price would be paid, but not by taxation; and when the pound of flesh was being exacted it would be by inchoate forces few would understand or correlate with the method devised for paying for the Iraq misadventure, and would fit in nicely with the Bush mantra of "plausible deniability". Because, although "the sufferers would have no inkling" of what has befallen, the Fed and the Bush administration knew exactly what the reasons were for this inevitable exacting of the pound of flesh overdue an economy bent on consuming the products of an impoverished work force whose own consumption was kept dampened by the totalitarian grip of a Centralized Government an ocean away. This strategy went hand-in-hand with the "cakewalk" fantasy of the Iraq War. So people's reaction tended to be 'as if' they were now at war rather than 'that' they were at War: almost more appropriate to make-believe than to belief.

This same paradigm of neglecting any form of planning or reining in of consumption, but instead stoking it, will have the same dire effects on the economy that the Wars are having: wringing reality out of it by catastrophe, so that no one will have to be held accountable. This is what conservatives mean by let "Freedom" wring. As the Chinese economy, where manufacturing accounts for 40% of GDP, continues to grow at 10% per annum, ours continues to shrink, while using 4 times their energy input in terms of just oil burnt, meaning that, whereas the Chinese have a balance of productivity vs consumption, the USA has a declining ratio, wherein the percentage of energy inputs into the economy produces less and less currency-earning production, ie, leaving no means to pay for increasing energy consumption save by borrowing. No one in Congress or the Executive has said one word as to how to redress this mushrooming imbalance. It is simply not discussed, because, as both The Bush and Obama administration have declared, "The American Way of Life is not Negotiable". What that assures is that the car-driven, militarized economy, in which there are no real civilian employees, as all aspects of the economy are suborned to militarization, will not even bother pretending to disguise itself any longer: without continued and escalating levels of Military expenditure, the US economy smashes into the brick wall erected by stoking global overcapacity and continued workforce impoverishment.

The similarity to the financial meltdown can be made apparent by using an analogy to the USAIR aircraft that was forced to land in the Hudson River. Just as the pilot, using his goose down control, could've kept the geese from flying into his engines, but didn't bother, as he believed himself astute enough, and his engines powerful enough, to not have to consider such trivialities as a flock of fuckin' geese, so Bernanke, at the helm of the world's economic engine, believed its resiliency so strong, and his own stewardship so masterful, that his "subprime crisis can be contained" attitude convinced him to steer right into the turbulence.

Then, having brought the economy to its knees, without wrecking the ship and killing all the passengers, he considered himself to have "Saved the World". But it is precisely that attitude which caused us to fly blindfolded into danger in the first place, and although we've survived the calamity, we have not emerged unscathed, only he has.

And now, so sits the Military. Coyly referring to our gargantuan War Machine as "defense", we brashly drive it through barbed wire, over Sovereign States, through International Law, oblivious of any weakness, as any deviation from The American Way is simply "Not Negotiable". Then when the inevitable blowback comes, we are already prepped in the language of Hate. The They only awaits an explosion our own policies will cause, but that will have the plausible deniability we've come to love almost as much as ourselves.