Posts
The Mask of the Red Death.
 |
| Dr. Li Wenliang: Like Trump, Xi Shuts up Whistle Blowers. |
As we were discussing the economy a few weeks back, someone asked what the justification was for the Fed's moves and the administration's use of every economic stimulus in the book to goose an economy he never stopped extolling as "perfect".
Then that horrible Nascar accident happened in which the driver of the car impossibly survived.
Those cars and drivers are hyper-tuned, optimized for speed and acceleration: Performance overrides Safety.
Safety becomes not just an impediment, but a drag on that performance they so ardently wish for so as to Wow their fans and maintain the illusion that such hair-trigger control at reckless speed by mere mortals is sustainable.
It's not.
And it's not sustainable for an economy either.
Yet, Presidents, having the desire to out-perform their predecessors, and to get re-elected, don't really care about sustainability/safety. If they learned nothing else from the Reagan/Bush era, they learned that you can pull the rug right out of the economy's future yet stoke its current performance by incurring mountains of Federal debt to create a Bonfire for the Vanities of your constituents, and, despite the "Family Values" rhetoric, destroy any chance of our own children's tomorrow by giving them that dream childhood your ego feeds on today. Reagan is idolized to this day, even as the economy careens out of control and threatens to crash in Nascar spectacularity for the exact same reason: it has been so fine-tuned, stoked to such a blistering heat with all its "inefficiencies" ironed out that, like Ryan Newman's perfectly running machine, it can countenance not the least bump, the slightest abnormality in its trajectory or it will quickly start doing completely unpredictable spins in the air that can leave it nowhere else but on the ground in pieces.
But, for presidents, that's their successor's problem.
Sound familiar? That's because it is.
Boeing (stock symbol BA) not only engineered a plane with similar characteristics to Nascar's racing machines, it did so for a product that would stuff and snuff the hundreds of passengers who were on board for the ride.
BA-BA, black sheep.
Although it should come as no surprise, coming from an administration and a mindset that thinks the government should be run like a business, The Plump Administration followed the exact same arc as Boeing did in handling its Max factor:
Denial.
Minimize the problem.
Ridicule critics.
Blame someone else.
Claim you did everything right and thereby deny any responsibility.
Pretend the problem will just go away after a quick fix.
Underestimate the response from the public; that same public you're counting on to bring you back from the abyss.
And like Boeing, we think "We'll get through this", which of course, some of us will. But like Boeing, if we do, we, or you, as I may not be included in that group, will not be the same. Like Boeing, we think this will "wash out", as though it's shampoo, and we can all go back to how we lived before.
Facts suggest otherwise.
And last but not least, the US economy is just as dependent on the false stimulus and corrupting influence of the constant increase of unproductive, markets-skewering Military spending, such that Boeing apparently all but forgot that not all of their machines are supposed to kill people. They instead firmly believed that the fact that their most profitable products are designed to wreak mayhem has no effect on the behavior of the people working there. But just as in the rest of the economy, which also depends on the build-up of Death Machines and Nuclear Annihilation scenarios to maintain the Overkill capacity of its deadly massive missile force, the widest profit margins are reaped by the deadliest systems, precisely because those systems will never be used, and therefore, the customers can't complain. As far as any of us knows, the entire nuclear arsenal could be a total sham. I mean, given that they are all private contractors whose only requirement under law is to return the maximum dividends to their Shareholders, not to provide a superior product to their customers, who can, at least theoretically, go to another vendor, the US military in the arena of nuclear arms has no such choice, and hasn't the legal go-ahead to test nuclear weapons, so must accept them as though they work when in fact the incentive is in the opposite direction: to provide a Potemkin product and funnel the cash thus saved to fatten investors' IRA's instead.
The Princess and the Petri Dish:
Just as no matter how much or when the FAA and Boeing tell people the Max 737 is safe, no one's going to be chomping at the bit to climb on board one, likewise, the Princess can claim she removed the pee under the mattress, but still no one's going to want to lie on it during a cruise on those ships for quite awhile. So if they expect that paying customers are just dying to be floated off to foreign climes in their petri dish ships after a few weeks of self-isolation, I can't but feel that they are sadly, tragically mistaken.
And then there's
OIL: We've rigged the economy such that the US is now a Petro-State, with its economic future completely tied to ever-expanding fracking and the resultant Petrochemical plants springing up like mushrooms as though we're all in the cast of The Graduate, and plastic's the industry of the future on which we should all pin our hopes. But the drop in oil prices didn't just drop US oil companies' income, it caused the value of the dollar and the enormous pile of claims on them it is a promissory note for, to lose value just as the costs and magnitude of US debt is set to dramatically increase (hence the "Pro-active" Fed response. But the only thing that pulled us out of the Great Recession, besides China, was oil ... without those, US debt becomes toxic. So the Fed can lower interest rates all it wants, but the more it does so, the more its balance sheet balloons, because there'll be no one left, there already WAS no one left, to buy our debt except Kung-Pao Powell's Fed).
In 2008, in mid-December, a full three months after the market debacle that precipitated the Great Recession, or what most economic analysts not pushing a narrative, refer to more accurately as the century's first depression, although the price of oil dropped precipitously, prices for U.S. crude (WTI) for January 2009 delivery never sank below $40.06 a barrel on the New York Mercantile Exchange.
It's currently trading for April contracts at $27.77.
Remember "Pro-Active"? That's what the Fed chairman called the cut in interest rates, long before the virus, during that short-lived span of time last year when they made a farcical attempt at "rate normalization" (See that embedded "normal" in there?) That phrase was used a lot in 2008. Not only has it never happened, but had Powell considered continuing along the path the FOMC had turned down, the one thing he could be sure of was that President Plump would have simply fired him and put in his place someone who would do his bidding ... that's what he does. So like that other infamous Powell, Colin, despite his misgivings he did what was expected of him in order to keep his job. Which reduces said position to that of a sinecure. Anyone can sit there and obey orders, but that means there is no responsibility in your own hands any more, it's an empty position you retain just to collect a paycheck.
"I’m good enough, I’m smart enough, and goddammit, people like me!”
 |
| The Man With No Plan: The USA's Corona-in-Chief. |
That gives a whole new spin to Gresham's Law, which states that, "Bad money drives out good". And now we have Fake money driving out Real money, with the loudest accuser of Fake News (yes, that's right, he called the virus not only a hoax, but fake news, as well. His One-man show has an extremely limited repertoire) becomes the loudest advocate for Fake Money.
Yet prices could fall even further as the battle for market share heats up.
And lest we forget, the seditious Birther is now following in Obama's footsteps and pulling oil out of the ground in one part of the country to pour it into the ground in another; filling the SPR, not as a future emergency supply, but to keep pumping oil out of the ground for which there is no demand in order to pump dollars into the failing oil companies' coffers. So that Exxon, majority holder in Texas' Permian Fracture zone, can continue to pay dividends to its shareholders. Blatantly using public money to enable failing Corporations that used their Trump Tax cut to buyback their own shares, now use yet more public money to lard onto their shareholders monies wrested right out of the pockets of taxpayers. The Free market, they call it. Where the Market meets every demand, every eventuality being reflected in the price and government needs to, in Ronald Reagan's words, "Just Get out of the Way", "Shrink it until you can drown it in its own bath water", insisted the same Republicans still ruling the roost in the Congress as they shut down the US government, insisting its spending would push us over a "Fiscal Cliff". Exactly where they planned to work should that eventuality occur they were never worried about, as they're cynical diatribe was all for show for their Mad Hatter's Tea Party: Showboating. But the bitter brew they steeped continues to hamstring effective governance, the only outcome they ever really desired, to this day.
The upshot being that the world, like Boeing, is being forced to learn that, No, life's not going to go back to "normal", for the simple reason that what we, and Boeing, have come to consider to be normal is so far afield from anything remotely resembling normal. Just look at who we've put in charge should you doubt that.
No comments:
Post a Comment