Relevant and even prescient commentary on news, politics and the economy.

It’s not the tax and spending cuts, it’s the destroyed trust that has doomed our economy

By Daniel Becker
In the comments to my post “A reminder from Obama’s February 2009 speech”, there is the following:
“I guess it relates to the fake Obama they had made up in their heads,…” 
This sums up the early comments to the post suggesting that those who trusted Obama have only themselves to blame.
I addressed that concept in Obama, is he or isn’t he real…?  In that post I presented transcripts of Obama’s speeches and responses to questions and then argued:
“Are those talking like Glen Greenwald correct in that people should not be surprised with Obama’s appointments? Maybe, but then based on the above Obama words, that would mean we (you and I) just plain have to approach our relationship with governing as suspect until proven otherwise. Unfortunately, that means we will always be a day late and a dollar short having never known at the time of the decision if we made the correct one because you can not go by what is said.”
I recommend people go and not only read the posting, but the comments. (History is always fun to review.)
I concluded that posting with:
“Do you know what happens to a person when they can never get a straight, no hidden agenda answer from one they count on? They go nuts.”


This all speaks to the issue of growing our economy, because to promote distrust in a developed economy where 77% of our capital is intangible (via 2005 World Bank study) is to be destroying the prime driver of our growth. I wrote about the issue of were our true wealth comes from a few times. For this posting I am drawing on Attention Republicans/Blue Dog Democrates: Tax cuts as stimulus work against your goal.
February 5, 2009.
From the World Bank study:
“An economy with a very efficient judicial system, clear and enforceable property rights, and an effective and uncorrupt government will produce higher total wealth.”
I concluded:
“The republicans/blue dogs, and those helping them by lending their “professionalism”, think they are only effecting a political strategy. In truth, they are destroying the very basis for the wealth they desire. Their entire campaign for decades to discredit, to instill mistrust in the primary institution we have, the US (We the People) government, has been the primary cause to our economic decline. To increase the level of distrust is to decrease the available “intangible capital” which is 77% of our wealth generating power. “
Which brings us to what we just experienced with the debt ceiling issue. It’s not just the resulting budget changes, it’s the overall cognitive change being made in the people regarding trust of our ability to access a candidate and make the choice that will produce the desired results. Clinton, as for the Dems made the first blow to our trust with “triangulation”. I can and have on my own gone back and read speeches and answers to questions by Clinton during his first run and it shows the same as I note regarding Obama in “is he or isn’t he real”. Obama is (knowingly or not) bringing our trust close to death. 
Even the debt ceiling event is only the latest in a string of recent events that all drive an additional spike into the coffin of “trust”.
Last night on Racheal Maddow’s show, Chris Hayes, noted that we are now in a phase of governance where “created” crisis is the vehicle for results. Yes, Shock Doctrine governance level II.. It was presented from the perspective that the conservative mind set is the one employing such a tactic.

In my opinion, what he missed, and what makes this a unique form to this nation’s version of Naomie Klein’s Shock Doctrine is that there are enough economically conservative minded people in the opposing party (democratic party in this case) that the ruse can be played out with a more believable presentation than if just one side is playing along. Yes, both side play it differently, but would that not be expected based on the supposed “base party” paradigms? At no time during any of these “crisis” did the primary players on the democratic side resist the crisis by calling it out. Instead, they used it to get what the conservative faction of the party (a smaller faction since the last election) wants. These “wants” being very much inline with the republican non Norquist/Tea Party faction’s wants. Commonly referenced as Wall Street. In the end, no one to blame…It was the crisis.
This pattern has held true through out Obama’s current term.  In the latest example, the proposed budget from the house progressive caucus, the largest of the democratic party caucuses never was mentioned by the president. Recall the single payer health insurance issue?
The issue for this posting is not the “wants”. It is not about the resulting policy from the latest ruse played on We the People. The prime issue, the issue always suggested, implied, bandied about, but never out and out confronted: Public Trust.
This latest Obama/conservative policy process has brought us closer than ever to the demise of our economy and thus our democracy not primarily by the furthering of the financial disequilibrium, but by the perpetuation and enlarging of the perimeters of social order that will now be distrusted. I think we have approached, if not completely included the full boundaries of American culture in that which is to be distrusted with the completion of this debt crisis event. 
Sadly, I do not think Obama and those referred to as the “adults in the room” know what they have done. Instead. as I stated above, they believe they are just “effecting a political strategy”. 
There are 2 versions of distrust. First is the distrust nurtured by those who have made it a political tool of their strategy for political dominance, power and fortune. It is the “…most dangerous words in the English language: I am from the government and I am here to help you”. These people do not know that in essence their distrust is part of the ruse. The other distrust is those who see the ruse, have acted via those they trusted only to find they can no longer be trusted. I don’t believe one is worse than the other, but I do know having both means the solution will be slower in materializing. In both cases those in power can not be trusted and those who know it, presently have no one in power to represent their solutions.  It serves to make the what is the solution clear, it does not server to make it any easier or quicker in coming.
I do not believe this mode of operation is forever simply because we are not naturally selfish, self serving for survival sake creatures. We are not naturally so shallow in our collective thinking. It is only in our isolated, individual thought that we can and will be shallow. Of course this assumes that the concepts and application of virtual reality throughout our daily lives does not mutate us way from our natural self.  A big assumption considering “reality” is in the phrase “virtual reality” and the character dynamic is trust.

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The Only Human Crisis

Various pundits have been putting forward candidates for the big human crisis confronting us. They all agree that something is, but can’t settle on one or another.

Throw a dart. Is it human rights? Terrorism? How about “the economy?” Not many people talking about the fisheries, though you could make a good case for a collapse of the ocean biosphere. Or how about one that effects us all — climate change?

The crisis facing humanity is not any of those. The crisis is “waking up.”

We have slept over the past thousands of years, with our little dreams, our amateur class plays of wars and histories and arts. While all this went on, our mother earth uncomplainingly fed and washed and cleaned up after us.

So long as the “house” was big enough and we were small enough so our messes could be absorbed, we have had a lot of room to do what children do – learn and grow and break things. (I have a theory that breaking, burning and cutting things is a indispensable part of childhood. How else can you learn the properties of materials like sticks and vases and your little sister’s hair?)

Well, the clumsy, drooling baby stage is over. The kid’s gotten to be big and strong, destructive, creative, with the flashes of insight and compassion that presage adulthood. The baby is now a teen. Be afraid.

The teen years are the time of maximum health and energy, combined with intelligence, ingenuity, and the tendency to make disastrous decisions. Research has shown that the human brain doesn’t really come fully online until the early 20s. We’re not there yet, believe me.

Luckily, although our species as a whole shows many teen-like qualities at the moment, quite a number of individuals have progressed into adulthood. We know what it looks like. This goes for nations also. In particular, the Scandinavian countries seem to have a grip on the concept of adulthood.

Don’t kid yourself that we will evolve out of this teen stage. As a species, biologically we have scarcely chipped our way out of the eggshell. Instead, the genius of our species is to devise and put in place social structures that preserve a shared memory and channel us towards some behaviors and preferences, and away from others. This genius, unfolding some 40,000 years ago, has allowed us to blanket the world with our species in every niche in every continent except the Antarctic. It’s the equivalent of the baby growing up into a teen who can raid the fridge and enjoy the entire house, coming and going as he pleases.

The last step to adulthood has nothing to do with claiming the privileges of adulthood while still assuming that mom will keep the freezer full and your clothes washed and folded. As we have gotten bigger, mom has got littler. Compared to us, she’s so shrunken now she can hardly keep up with our messes – and man, we have gotten messy.

Here’s our challenge. We need to grow up, and grow up fast, and it has to be done through social structures, ideas, and vigilant consciousness of all the ways it can go wrong. It will require embracing limits and looking far into the future. It will require wars, of some sort, to keep the juvenile delinquents from taking over the house, eating all the pizza and burning the place down in an angst-ridden snit. It will require seeing truly, acting ruthlessly, and living modestly. And damned if I know how we will manage it.

Moving our species smoothly into adulthood will mostly look boring. But taking the path of perpetual teenhood, though it would be very exciting indeed, can easily leave us with no home, just a smoking ruin without even any hot dogs or marshmallows.

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The disconnect of my economy with the money economy

by Divorced one like Bush

The Yahoo Financial page has had this headline from the AP up for a while today:
Top Stories
Investors are cautious as swine flu cases increase- AP
This is the first line:

The swine flu gave Wall Street a reason to turn cautious. The Dow Jones industrial average gave up a midday recovery and retreated about 0.6 percent Monday as the swine flu’s death count in Mexico grew to about 150 people from 100.

Really? Swine flu is the reason one should be getting out of the market. Not any of these:
Whirlpool 1Q profit drops on weakening demand – 1 hour, 4 minutes ago
– AP

Whirlpool Corp., the world’s largest maker of stoves, refrigerators and other major home appliances, said Monday its first-quarter profit fell 28 percent on slumping sales, softening consumer demand and the stronger dollar.

Boeing CEO calls slump ‘once-in-a-lifetime’ event – AP – 1 hour, 5 minutes ago

Boeing Co. Chairman and Chief Executive Jim McNerney assured shareholders Monday that the company is in strong shape to ride out the “once-in-a-lifetime” downturn that has walloped its profits, jetliner orders and stock price.

GM to cut 21,000 US factory jobs, shed Pontiac – AP – 2 hours, 39 minutes ago

General Motors Corp. could be majority owned by the federal government under a massive restructuring plan laid out Monday that will cut 21,000 U.S. factory jobs by next year and phase out the storied Pontiac brand.

Or this from a few days ago:
Retail import volume at U.S. container ports to decline at least through summer, report says

Import cargo volume at major U.S. retail container ports fell again in March after dropping below the 1 million twenty-foot-equivalent (TEU) mark in February, the first time in seven years the total had fallen that low. And the volume declines should continue for at least a few more months, according to an IHS Global Insight-National Retail Federation (NRF) report issued Wednesday.

U.S. ports will handle an estimated 987,371 TEUs in April, which would represent a 22 percent drop compared with the same 2008 period, after handling an estimated 930,142 TEUs in March, a 19.7 percent decline compared with March 2008’s total, according to the IHS Global Insight-NRF monthly Port Tracker report.

Swine flue is what’s doing it for you hey? Not that workers are being shed, profits are down, container traffic is down. I mean come-on, what could a company not making a profit or selling less stuff while shedding jobs in a down economy that was 70% consumer driven have to do with you making money off of their stock. Nothing I guess.

Nothing has changed. There are still two economies and only one of them is a concern.

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