Next (James Howard Kunstler)

[Tace]

James Howard Kunstler -- World News Trust

Feb. 14, 2011 -- For a month, Egypt has been a magic mirror for America to behold its own wonderfulness, like a diorama of "Freedom and Democracy" out of a Kentucky creationist museum. In this, our hour of national narcissism, we imagine a replay of Bunker Hill, Valley Forge, and Yorktown -- with a falafel on top -- in the streets of Cairo in order to prop up our own disintegrating self-esteem, while committing arson on our national household.

Also conveniently forgotten for the moment -- because there's nothing dramatic about nothing happening -- is that a particular corner of the Middle East remained stable for thirty-odd years. Did we fork over $70 billion to Hosni Mubarak during that period so he wouldn't start another war? Could be. But it was surely money better spent than the even larger nut we dropped all at once on AIG, Goldman Sachs, and a few other domestic fungi on the tree of liberty back home. And we're still shoveling billions from the Federal Reserve into a claque of Too-Big-To-Fail banks in the form of a ZIRP loan carry trade under the pretense that they can use it to shore up their "reserve ratios." A lot of people from New Jersey to Seattle need their reserves shored up, too, but they can forget about running personal ZIRP carry trade rackets out of the Fed's loan window.

Contrary to what some readers suppose, cynicism (as in, thinking the worst of everything about everyone) is really not my bag -- though comedy is another matter. However, if ever cynicism was an appropriate response to something, it would be the initial throes of a political revolution. The early triumphs in and around Paris after 1789 must have been soul-stirring, but you could forgive a casual observer who caught the scent of trouble in the air -- and what followed was a years-long dismaying merry-go-round of mis-rule that climaxed in the Reign of Terror and finally resolved a full decade later in the crowning of another absolute monarch: the emperor Napoleon. Gazing back at all that, it really took France nearly a century to get its act together politically from the moment that the governor of the Bastille surrendered his keys.

All forms of government in recent times find themselves in the same predicament: the mismanagement of contraction. Too many people and too many enterprises are competing for a contracting resource base. In many poor countries it expresses itself plainly as expensive food, or no food at all for some. The expensive food part of the story is already being felt in the wealthier countries, too, but the contraction expresses itself more in terms of money -- many people do not have enough, or else much less than they were used to having, and at the same time the money that does circulate seems increasingly worthless. So we have the great debate over whether the contraction is deflationary or inflationary.

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[prairierose]

1. Tace, the link isn't working correctly...

hoping you can fix it before editing time runs out.