Forget About "Recovery"

[Crewleader]

by Jim Kunstler

At the risk of confirming my critics' dumbest charge -- that I am a "doomer" -- the mandate of clarity requires me to ask: to what state of affairs do we expect to recover? If the answer is a return to an economy based on building ever more suburban sprawl, on credit card over-spending, on routine securitized debt shenanigans in banking, and on consistently lying to ourselves about what reality demands of us, then we are a mortally deluded nation. We're done with that, we're beyond that now, we've crossed the frontier and left that all behind, and we'd better get our heads straight about it.

I maintain that there are countless constructive tasks waiting to occupy us on a long national "to do" list for rebuilding a national economy, but they are way different than the ones currently preoccupying government and the mainstream media. The Obama White House, Congress, and The New York Times are hung up on exercises in futility -- "rescuing" banks and insurance companies that cannot be rescued (because they are hopelessly trapped in "black hole" credit default swaps contracts), and re-starting a "consumer" binge that was completely crazy in the first place, based, as it was, on a something-for-nothing standard-of-living.

Meanwhile, if the buzz on the blogosphere is a measure of anything -- and I think it is -- then a new consensus is forming out there about where to start doing things differently. Unfortunately after less than two months in office, President Obama finds himself awkwardly behind-the-curve on this. It begins with the understanding that a general bank rescue is hopeless and, going a step further, that the people who caused the train wreck of "innovative" securities have to be prosecuted. The public's collective voice on this is muted but growing. It has been muted by the general air of blackmail that the banks have used to enthrall policy and opinion -- the "too big to fail" idea -- in effect holding the nation's future for ransom.

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

[marketcrazy1]

1. to big to fail equals WMD

we were lied to before, we are being lied to again!. will we EVER learn!!!!!

[The Traveler]

9. They are too big to fail

And no sanely managed government allows any private entity to become THAT powerful, to become THAT necessary to the operation of day-to-day business. Private entities that grow that powerful represent a failure of the system of checks and balances.

But ... in what context are they too big to fail? They are certainly too big to fail if our intention is to prop up what has become the status quo. But I think a lot of us are visited with a growing certitude that the status quo was untenable in the long term, and that recent events have delivered a death blow.

What is unclear, and what is subject to debate, is what we do about it now? By what new strategy and structure shall we attain something resembling prosperity for the common human?

Trav

[stillcool]

2. I don't think his opinion has any value...

based on this writing...

http://jameshowardkunstler.typepad.com/clusterfuck_nation/2009/01/farewell-gwb.html
GWB was reputed to be an appealing personality off-camera, relaxed among his cohorts, full of fun, warmth, jokes, and nicknames. He was not quite as bad on-stage as his critics complained -- his natural obtuseness sometimes came off as candor -- but he was programmed by handlers with a range of poor locutions that eventually amounted to a world-view. For instance, the idiotic "war on terror," which served mainly to portray our adversaries as abstractions. His insistence on the term "victory" when speaking of our situation in Iraq actually fooled even his worst critics into thinking we were engaged in a "war," when for years it has been more accurately an awkward and lethal occupation.
I never believed that GWB actually tricked the nation on the "weapons of mass destruction" rationale for invading Iraq. Rather, the nation fooled itself into thinking that the war, in the first place, was anything but an act of vengeance for the gross injury of 9/11. After a couple of years, the public adopted the stupid narrative that they were "lied to," rather than recognizing the difficult truth that 9/11 had to be answered with lethal force, that international hostilities are far from wholly rational, and that Saddam Hussein got whacked because he was the Arab head-of-state who was the best candidate for getting whacked. A nation in thrall to psychotherapy, and self-esteem building programs, and the "win-win" bullshit of business Babbitry, couldn't imagine a tragic dilemma when one was staring them in the face.
GWB won reelection in 2004 -- running against the weak John Kerry, "a haircut in search of a brain," as Kevin Phillips put it so memorably, who was not smart enough to pander successfully (though he tried) to the dominant, Jesus-soaked Nascar fans who inhabit the Moron Crescent that runs from West Virginia south through Dixie and then west into Idaho. GWB was still riding pretty high when Hurricane Katrina slammed into the swamps and beaches east of Lake Ponchartrain, and the president failed to direct anybody to so much as air-drop bottled drinking water for survivors dying on rooftops and highway overpasses in New Orleans. The Left, once again, adopted an idiotic narrative to explain the event -- that Bush acted to punish African-Americans -- when plain incompetence combined with grandiose expectations for a televised happy ending to instead produce tragedy.

[scarletwoman]

3. Hmm. I don't find anything in that excerpt that I would argue with.

How about you point out your objections?

sw

[AndyTiedye]

5. Here's One

9/11 had to be answered with lethal force

against a country (Iraq) that had nothing to do with 9/11???

[scarletwoman]

11. The way I read it, he's saying that was the mood of the country, not his own assessment.

I think he's fully aware that it was bullshit, but that's where the collective psyche was.

sw

[stillcool]

13. Okay...

GWB was reputed to be an appealing personality off-camera, relaxed among his cohorts, full of fun, warmth, jokes, and nicknames. He was not quite as bad on-stage as his critics complained -- his natural obtuseness sometimes came off as candor

...After a couple of years, the public adopted the stupid narrative that they were "lied to," rather than recognizing the difficult truth that 9/11 had to be answered with lethal force

....GWB won reelection in 2004 -- running against the weak John Kerry, "a haircut in search of a brain," as Kevin Phillips put it so memorably, who was not smart enough to pander successfully (though he tried) to the dominant, Jesus-soaked Nascar fans who inhabit the Moron Crescent that runs from West Virginia south through Dixie and then west into Idaho. GWB was still riding pretty high...

...The Left, once again, adopted an idiotic narrative to explain the event -- that Bush acted to punish African-Americans -- when plain incompetence combined with grandiose expectations for a televised happy ending to instead produce tragedy.

[marketcrazy1]

4. I dont care who the writer is

the fact is we ARE being lied to about this to big to fail crap ............... I dont buy it because i KNOW better.

[stillcool]

14. You know better?

that's great! Tell me, what happens when these financial institutions fail? What happens to pensions? What happens to the FDIC?

[raccoon]

23. Thanks for that info! From Wikipedia:

From Wikipedia:

“In 1966 he graduated from New York City's High School of Music & Art, and then attended the State University of New York at Brockport where he majored in Theater.

After college Kunstler worked as a reporter and feature writer for a number of newspapers, and finally as a staff writer for Rolling Stone. In 1975, he began writing books and lecturing full-time. “

[Patchuli]

6. Um, could our new President even have 6 months

before this Mr. Kunstler predicts it's not working? He's a real Debbie Downer...

[marketcrazy1]

7. I dont think we have six months

and neither do many others.

[TBF]

8. Did all of the die-hard supporters have a meeting and decide anybody

criticizing the administration would be called "debbie downers" because I've read it about 20 times today. You need some new material.

[readmoreoften]

10. Yes. Waiting six months after Katrina to take action would've been a bad idea too.

People criticized Bush for not taking action with that "Al Qaeda Determined to Strike." Obama just seems so nonplussed by the whole thing. And the fact that he has banksters and free market cheerleaders as advisors informs my expectations. Garbage-in/Garbage-out.

[upi402]

19. exactly why I have no hope. The "new" Dems- meet the new boss...

same as the old boss, but with new improved SANITY POWER! Obama is doing some good things, and like Clinton, the stuff that matters -economic justice- remains corrupt.
I've stuck a fork in it, I'll be happy to remove it. But a day of bottom-bouncing or stem cell research ain't gonna budge it. Just more licking it around the edges.

[Patchuli]

17. Not that I was invited to, but the complaining and criticism

on our own side started before he even took office with his appointments. It's gotten kind of old. I'm not advocating that Obama waits 6 months to do anything (which he certainly isn't), but maybe the alarmists could give his ideas a chance to work. It didn't get fucked up overnight and it won't get fixed overnight. He's got a hell of a mess on his plate.

[SlowDownFast]

12. WE DON'T HAVE 6 MONTHS!!!

Now have another sip of the Messianic Koolaid.

[Patchuli]

18. And the sky is falling, Chicken Little ! Duck!

:scared:

[SlowDownFast]

21. Sure is. Shitstorm's coming and you don't have an umbrella, I bet.

Spent all your money on Koolaid, didn't ya?

[Patchuli]

24. Nope, Chicken Little

Life's been a shitstorm for years. Nothing new...

[GliderGuider]

16. I don't think you've been reading the newspapers lately

We don't have six months!

The shit has already hit the fan. We may have until the end of the second quarter until it blows back into our faces.

[GliderGuider]

15. My take on the "too big to fail" meme

1. The big institutions are "too big to fail" only in the sense that they will do incalculable damage if they do.

2. The threat of that damage is making people do desperate things with enormous sums of money, like shovel it into the maw of the gurgling economic volcano in the hopes of propitiating the angry gods.

3. No amount of paper money will stop a real volcano from erupting, and no amount of its electronic facsimile will stop the economic one from erupting.

4. The banks are structurally incapable of survival. They are going to fail, no matter how non-negotiable we think their survival may be.

5. When they erupt they are going to spray the ashes of all those burnt offerings of cash all over the landscape, and it will be gone.

6. It's time to accept that the failure of the global economy in its current form is inevitable.

7. We need to stop shoveling sacrificial offerings (including all our savings and 401(k)'s) into the insatiable maw of the "Citigroup etc." volcano.

8. The money, time and energy we are spending trying to prevent the inevitable is irreplaceable. It is pointless to use it to try and save the past.

9. It is far better to husband our resources with an eye to rebuilding the future in whatever landscape is still standing after the eruption.

10. No matter how big they are, they will fail. It's time to accept that fact and plan with that assumption.

[upi402]

20. like sacrificing the virgin

throwing good money after bad

ad infinitum, Grandpa was right.

[quadropusrex]

22. OK, so the to-do list is....

1. Prevent a run on the banks & currency.

DONE.

2. Stimulate the economy

In the works.

3. Recover / reinvest

Give it some time.

4. Pay off the debt

Down-flate the debt gradually through carefully managed inflation and growth. See above.