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Thursday, July 10, 2014

Dresner's Got The Wrong Depression.

  When Bull Markets are goaded to outlast their natural run, Creative Destruction becomes simply Destruction. 

In Kirshner's apologia for the New Economic order, detailed in his Boston Review's critique of Daniel Dresner's, "The System Worked: How The World Stopped Another Great Depression" in which the all the earnings of Labor are siphoned off into the bank accounts of the Rich and Shameless, leaving workers enough to eke out a threadbare existence only by working more than one job and even then, not having the wherewithal to ever buy a place to live, even though, following the Chinese example, we build condos galore for enormous sums of money such that whole cities, or suburbs, in the case of the USA,  are replete with them, yet the workers who built them must still live hand-to-mouth in their cars or on the streets. In places in the US, perfectly good homes are being torn down while people go homeless, because that's how you make money in the New Economy. Like Corporations that primarily exist, not to serve their customers, but to dominate their markets, home-building, like everything else, exists not to provide housing, but to enrich speculators in Home-building enterprises' stocks. Hey, as Kirchner, echoing Dresner, proclaims, See? the system works!

Comparing it to the debacle that followed the Great Depression, and therefore, exultant that the collapse built into the elitist, Class Warfare of beggar thy neighbor in order to enrich yourself, not for a better life for you and your children, you already have piles and piles of cash you have no idea what to do with, but just to ensure that everyone else, but especially the workers on whose toil your own ascendancy depends, get nothing, Kirchner, like The Krug, and a myriad of other economists, look back only as far as the Great Depression, even though the 100 year anniversary of the Financial Panic of 1907, 2007, was when the recession and its associated Credit Crunch that brought on, and was really the cause of, the collapse of 2008, actually began.

As has become usual with me, it was pure happenstance that seeing this article corresponded with my completion of Michael Hudson's, "The Monster", a book I had the SFPL reserve for me  under the false assumption that it was the latest oeuvre by Michael Hudson of, "Super Imperialism, The Economic Strategy of American Empire" fame, written in the 70's, but found out instead that this Micheal Hudson was an investigative reporter working as a staff writer for The Center for Public Integrity (a word no longer applicable to the Private sector, as integrity has to do with morality, an impediment which the private sector prides itself for lacking) and the Monster to whom the title refers is Roland Arnall and his mortgage-scamming company, Ameriquest.

So it was especially galling for me to see the Dresner book and it's arguments lauded when in actuality it saved a system that worked, as it was designed to work, internationally, as per the other Michael Hudson, and nationally, as per "The Monster" Michael Hudson, to funnel the savings, pension plans and earnings of the entire globe into the coffers of a very few select players, all buttressed by the completely insane jingoistic military as a completely bought and paid for (by the very citizens at whom its guns were pointed) Sentry to guard the hoards of the Rich from the hordes of the poor.

A few articles I read along the way to actually essaying to essay this book, though, got in the way, because they had so many cogent and wonderful  points that made me wonder if I may not perhaps be getting too, I don't know, cloistered? Insular,? reading only those sites/authors that agree with what I already believe and therefore don't challenge my perceptions (The Boston Review article on which this post is based notwithstanding), because of the authors that I read, and all of whom I perused cogent articles by, between the short time I finished "The Monster" and started this post.

These include, of all people, as I haven't seen anything new from  him for awhile, Noam Chomsky, writing for ATOL (Asia Times Online, a much better alternative press than RT, as it gives much more even-handed reporting. RT is good at pointing out the glaring hypocrisies enunciated by the Western governments, but is, because of that, reactive. ATOL, however, reports news, sometimes in contravention to what the West reports, but oftentimes, since the Western media simply ignores most of the ROW, news and opinion that you'll not get anywhere else). Then, I noticed Michael Klare's article on the Resilience website expounding on his bête noire, now his cause célèbre (funny how that happens), the Energy Wars that everyone else is assiduously ignoring, a fact that emphasizes that it must have some validity.

Then my attention was drawn to William Blum's Anti-Empire Report's article on Snowden and its reference to President Obama's hyper-nationalistic speech to the matriculating class at West Point's US Military Academy, a speech that is deserving of a post of its own to rip it to shreds, wherein he extols the hyper nationalism that has become the hallmark of his administration, a jingoistic nationalism for which the US condemns, as the above-referenced Chomsky article points out, terrorists in the Mideast, as it endangers the US oil supply.

But, per Kirshenr, Dresner makes no attempt to reconcile any of these factors in his description of the "Economic Malaise" that currently grips the world economy in the wake of what he sloppily refers to as "The Great Recession", a term, as I've pointed out in prior posts, and insist is still the case, inaccurately describes the calamity, since it was/is, by definition, a depression, the repercussions of which will continue to plague us for years to come, just as the so-called Reagan Revolution does to this day, with sub-par growth , dysfunctioning economies and escalating global tensions amid a continuing mad scramble of States to claim for themselves resources that belong to them only because they say they do and have the military prowess, ie, totalitarian regime capable of enforcing the financing of military adventurism onto a public besotted by over-amped testosterone-driven fantasies of Exceptionalism, to have those claims go unchallenged.

As pointed out via several incidences documented in David Crist's, "The twilight war : The secret history of America's thirty-year conflict with Iran", although certain covert actions of intelligence agencies were instrumental for the US assuming its current stance on the world stage, the overwhelming "Crossing the Rubicon" point in history, where the US turned from being a country intent on spreading democracy to one intent on spreading lies about democracy, because it was when the Carter Doctrine was put into force as the guiding principle of US foreign policy, and the ferreting out of oil anywhere it existed began in  earnest, together with the concomitant rejection that the US polity had to conserve energy at all, or plan for a future of constrained use of petroleum, were rejected outright, and the ongoing crusade to dominate the entire globe in its pursuit of oil has morphed into the sole purpose of not only US foreign policy but is one that undergrids the entire economic base and includes the growth paradigm upon which rests the social fluidity of the Class system the US denies exists, wherein, instead of dividing the pie of economic benefits amongst its people, the US pretends that growing that pie will, to mix metaphors, raise all ships, floating on the hot-air-puffed waves of meringue from which such fluff froths into existence.

It is because of this philosophy, and its disastrous repercussions, that the financial crash of 2008 occurred, but nowhere are the dots connecting these phenomena connected, or the inevitability of another collapse, since failure to do so means we just start the same mad caucas race all  over again, and "you can begin and end exactly where  you like": so the price of oil has nothing to do with economic growth, and the growth of a larger and larger financial sphere, in which Education, Healthcare, and Housing, with its enabler of ever-increasing, unfettered-to-reality costs, Finance, siphoning off not only every nickel earned, but, via credit and the usurious rates charged to access it, every nickel you'll ever earn, is used to return an entire underclass to the debt-servitude of feudalism whilst expecting those same economically repressed subjects (the NSA and out-of-control SWAT-enabled police Forces have made a joke of the word "citizen") to drive an economy based on consumerism from which all the consumers with any wherewithal have been removed, yet then, as economists the world over are doing, scratch your head in wonder as to why there is such constrained economic growth. It's like pushing an armless person into the deep end of the swimming pool and wondering why they're drowning.

Yet in this atmosphere of squalid cronyism, Institutionalized fraud, and State-enabled economic predation, we're supposed to take comfort in the fact that "The System Worked", ignoring, as Kirshner opines, the fact that it worked a lot better for some people than for others, those others he refers to being everyone else except, not the popularly intoned 1%, but the, more accurately stated, .01%. Which he states as if that occurred simply by happenstance and not by the machinations of public servants who work mightily to maintain that status quo, as it's what put them in power and what keeps them there with their salaries at stratospheric levels when compared with the salaries of those whose tax dollars are needed to pay them. This is unceremoniously made apparent by the sea of poverty in which the state of Virginia is surrounded where it sits amidst the rest of the Southern States that are mired in low-wage hopelessness, while Virginia, full of fat-pay-checked Federal Employees, stands out as the sole island of prosperity in an impoverished ocean of Free-for-all Enterprise, wherein the Prize is a big-fat government contract to use to get public money for your oh-so-private firm.

But since, "compared with the Great Depression", the global system remained intact and free from protectionism, the system worked. But why it is important to note that the Depression starting in 2008 should more accurately be compared to the financial Panic of 1907, referred to as "The Rich Man's Panic", or, more cogently for our own circumstances, "The Bankers' Panic" is that, not only did it lead, in a mere seven years, to a global conflagration unlike anything mankind had witnessed before, destroying centuries of an extant international order, including the destruction of the British Empire, which in turn eventually gave rise to the Nazi Regime, the genesis of which is easily seen to have occurred in a prison cell in which Hitler, a casualty of that first War, wrote his plan for conquest and retribution, "Mein Kampf".

The Panic of 1907 was caused by a "retraction of market liquidity by a number of New York City banks and a loss of confidence among depositors during a recession", a much more similar state of affairs than the Great Depression, but one which they can't point at and say , "See? We fixed it, the system works". Because the levels of rehypothecation, defalcations, margin-betting on stocks, uncollateralized loans, embezzlement and unprecedented leverage on dubious assets was more closely resembling the state of the mania pre-2008, this is the more accurate crash to compare the Panic that ensued 100 years later, and it is in this year, 2014, that we reach the 100'th year anniversary of the slaughter that collapse predestined that I feel we should be looking at more closely and, instead of congratulating ourselves that the system works, be questioning ourselves as to why it works, as it is designed to do, for so very few of the billions and billion of humans on the planet, the welfare of whom, one would think of any economy described as global, should have as its first and foremost priority.

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