The Great Depression Goes Viral
Last July, I took a novice's look at hedge funds, housing, gambling and America's ass-backwards foreign policy and declared what I thought to be the obvious. The spiel landed on Alternet in the form of a supposedly sensational article called The Crash of 1929: Are We on the Verge of a Repeat?
I thought it was a hoot. Others thought I was high.
But it ended up being obvious. June gloom just killed off the second quarter of 2008, and the Great Depression is finally going viral in the mainstream media. CNN Money's closing report on yesterday's trading dropped it three times, including once in the subheadline. And they're not alone either. The economy has become the top election issue of the year, and chatterheads like Jim Cramer and Lawrence Kudlow are looking worse while doom prophets like Naomi Klein and James Kunstler are looking cooler by the day.
Which totally rules: The more people unplug from the Kool-Aid machine, the faster we can get past disaster capitalism and onto the next stage in our economic evolution, which is alternative energy. I say economic evolution, but it might as well be our salvation. If we don't get off gas fast, we're headed to a junkie's end. Ever seen one? Not pretty.
The first thing we need to admit to ourselves is that the war and the economy are the same issue, not separate ones. The next thing we need to to is unplug ourselves from the chatter, and plan for the future. Which means turning off Fox, CNN, MSNBC or talk radio, if only those programs that bypass research for retardation. Or redundancy, if you are offended by the metaphor. The point is the point, which is a tautological way of saying you are wasting your time if you are getting your news from people who are not only giving you not just their opinion, but the worst possible opinion available in
contemporary media.
See the games for what they are, and help those around you see them as well. We're trillions in the hole since Bush took office. Let's make sure the next president knows his way around a game theory, or two.
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You know I hate to sound like a broken record, or a corrupted mp3 file, but we are not the same people that managed to make it thru the First Great Depression.
We need electricity for our very existence. Think of how our homes have plugs everywhere one each and every wall sometimes multiple plugs on a wall. And we have all kinds of crap plugged in. Most of us cannot heat our homes without electricity, no mater how you heat, you need electricity to move the air and open the valves. Wasn’t it George Carlin that did a bit about if the Terrorists wanted to bring us to our knees fast they would simply have to go after our electrical grid? No juice, no gas, no cell phone, no heat, no light.
I for one do not have a fireplace. I am not saying that we need 100 million homes heated with wood but when we get into the full hunker down mode we will have to unplug as much as we can from the expensive corporate world.
I for one am sharpening my pitch-fork because we are just about due for some revolution around here. Perhaps the French were not totally wrong during their revolution.
I don't think anyone has ever expressed it better than this:
http://www.youtube.com/watch?v=pTbCNycm0nQ
I think that it is very relevant that we consider the words of General of the Army (FIVE Stars) and President Dwight D. Eisenhower.
"Ike" you may know of as the man who coined the term, "military industrial complex." He specifically warned that it would consume all other social priorities. And let the record show, this is precisely what it has done in a mere 47 years. In other words, within our own lifetimes we watched this thing occur.
"Any business other than war and oil," any scrap of legitimacy in the banking business, any attention to health care ... truly the list is endless ... all of these things have been consumed, just as "Ike" predicted.
Although this is a "business" column, I think it's time that we very-seriously consider that what we are is "300 million Plaintiffs," that is to say, victims of high crime. We're not doing business to prop these people up, and they surely are destroying all of us. One of the most-important things that I believe the business community worldwide must now do, is to demand justice. We are entitled to that.
I would like to remind everyone that Dwight D. Eisenhower was a Republican.
Scott, I have read articles in the MSM(as far back as 2005) by people in government(David Walker for one), that stated we are headed for the cliff at full speed economically. Too bad these articles are few and far between. We get sugar coted crap from predatory capitalists telling us everything is ok. Sure it is, Spudlow and company will sneak out of the country when the sh*t hits the fan and we'll be left holding the bag. Hard times are coming my friends.
Even scarier.
During the Great Depression, the people didn't have money. But the government did. Government looked for as many creative ways as it could to get its money out to the people, such as the great works projects.
Today, however, we have the opposite. Not only are significant segments of the economy failing, but also the government has no money. It owes.
Thanks to "trickle down" -- or, as I like to call it -- "borrow and waste."
"Trickle down is just another way to pee on the Littlle People" take that ! "Bad Word" monitor
Dr. Strangelove
I believe you, but where are we to put our money to safe guard it, or will that be mute? I'm trying to figure out why this administration wants/is destroying this country, for what? Can they not see what is happening?
I agree that our government should nationalize alternative energy, after I see what the oil companies have had in all of this, we should have nationalize them too, a long time ago!
Super Capitalism is to much.
See what deregulation helped do to our country.
I think I'm seeing what happened to Rome centuries ago.
Now they want to go to war with Iran, we can't even keep up with the big two we have going and with all the others we know little about because the media just parrot's what this administration wants said.
Get out of the stock market. Liquidate your 401K if you can and take the tax hit or borrow the max out of it. Whatever is in there is going to be LOST, LOST, LOST. Buy precious metals. Gold and silver and I mean the real stuff that you can hold in you hand, not stock in gold or silver mines or paper that says you own some (I hear that there is enough silver on paper being traded to equal 3 times the actual amount of silver that physically exists). Anything you hold in paper is going to be worth exactly what paper is worth (and I mean the stuff you put in your printer) as the Fed continues to debase the currency (the increase in M3 is running about 16 to 18% according to Shadowstatistics). If you think inflation is scary now, just wait until what is in the pipes hits the gas pump and the grocery store.
Sounds extreme, Suzie. Especially the 401k route.
Alternately, parking your 401k in safer, lower risk options (bonds, insurance, etc. -- just make sure there are no Mortgage components!) and riding it strikes me as a better strategy. If things collapse enough to make your strategy worthwhile, you'll still have a tough time trying to barter gold for gasoline/food. ;-)
As for non-401k ... I sense we are on the verge of a period where "Cash will be King."
The goal is no longer "to make more money" but "to preserve capital." If inflation goes through the roof, most of us won't have many options.
Definitely go out of (or significantly reduce your stake in) equity (stock) markets, though, for the foreseeable future. And finance/mortgage investments will be hawked like snake oil -- stay away, they are still poison. they are incredibly cheap for a reason.
Seriously ... it is no longer "fringe" to have a stock of food, water, and other staples, though.
I have been operating under a feeling of gloom and doom for the last 5 years. I do not patronize WalMart ever, and have worked very hard to purchase things made in the US, and pass up virtually everything made in China. Our family has cut back and our only debt is our mortgage. I ride a scooter or walk/bike whenever possible. We are by no means wealthy, but we have been very careful with our money. We take local vacations and have taken up camping for recreation (which I hate).
We should think of ourselves as lucky, right? There are so many with such dire financial situations.
The problem is this: we will probably have to cut back even more to stay afloat in the future. I lay the blame for our depression-like economy squarely on GWB and his poor decisions on our behalf. This is not the 'American Dream' our parents worked for, and I can't help but wonder what my grandfather would have thought about our situation today. Bleak.
Bleaker still is what our children and grandchildren will face.
And alternative energy is the opposite of capitalism, why?
He's proposing that alternative energy can be the primary driver in an alternative [keynesian, I suspect] version of capitalism that isn't Friedmanite / disaster capitalism.
I don't think they will contract the money supply as they did in the 1930's.
Prices of many goods like TV's and cars will fall because of a lack of buyers.
Wages will stagnate.
Food etc will continue to go up.
As a computer contractor I see pressure on rates, but in the out years boomers will semi-retire and this will lead to a labor shortage which cannot be made up by young people or H1B's.
I am currently working in the mortgage business and I can tell you that mortgages are not the big problem- derivatives are.
golden: Never EVER underestimate the capacity for Business to screw employees. "A labor shortage which cannot be made up by young people or H1Bs?" I *gauarntee* you this is not true.
One perfectly rational delusion you may be operating under is that Business is interested in maintaining certain levels of quality/service. They WILL nonchalantly through that to the curb if it means using cheap labor. If they can't import the labor, they will offshore the work (how much technology work HAS to be done IN the US, after all?). We cannot compete on "quality, education, or skill," because when the competition works for 1/6th (or less) what a skilled US employee would earn, the Business will go with the cheap labor EVERY time. Plus, the skill/education/experience level of the cheap labour is also raising!
I have been reading about an impending labor shortage since the 80s. And EVERY time I have said "Well, at least this is the worst it can get; Business will HAVE to start treating employees better," I have been rudely surprised and mistaken. It DOES get worse, every year, and unless/until we recognize the mindset of Business (employees are costs) we will continue to be surprised.
Yeah, there are thousands of newly minted PhDs and other highly skilled engineers and programmers being minted every year in China and India (and Brazil and eastern Europe, etc). Companies like IBM wrap their whole business plan around outsourcing work to wherever the workers are cheapest.
Politicians say the answer to unemployment is more education. Tell that to the outsourced engineering PhDs.
What's eerie to me is that in the first Great Depression, speculation and rising prices for grains drove farmers to plow up marginal land, instigating a biological disaster (the Dust Bowl) alongside the economic disaster. And today? Well, they're growing corn on land that hasn't been in production for years, and that land has flooded, and the environment is probably going to bite our butts right as we're watching bank runs and foreclosures and the whole scenario of 1932. It's looking bad.
Nationalize alternative energy - greedy speculators have plenty of our money. The industry I work in has been hit hard, like many - yet curiously our business is BOOMING in Texas - money is no object. From what I've been able to find online thus far the speculating vultures have already begun circling the alternative energy industry and their lobbyist already know all the shortcuts to winning Washington's favor. Your point of view is important Scott please keep the info coming.
The economy may be inextricably linked to the war, but we would have none of the headaches we now have had "easy" Al Greenspan not been the maesto of the limpest money policy in the history of our time! How the FED and the stables of Regulators get away with what has germinated and now threatens to blossom into historical ugliness, is just beyond belief. It's kind of similar to NORAD permitting free flights of hi-jacked airlines. All delivered to you by Republican negligence. How's yer Haliburton stock?
"doom prophets like Naomi Klein and James Kunstler are looking cooler by the day."
And Naomi Klein looked pretty good from the outset.
10 Best Gloom And Doom Blogs/Sites
1. Daily Reckoning
2. Clusterfuck Nation
3. The Big Picture
4. DollarCollapse.Com
5. Angry Bear
6. Mish’s Global Economic Trend Analysis
7. Naked Capitalism
8. Peter Schiff
9. GREG MANKIW'S BLOG
10. The mess that greenspan made
These sites are good....I personally am a big fan of in no order are numbers "3, 6, and 7". These sites are fantastic and much better then Kudlow or Fast Money. Also Calculated Risk runs an outstanding blog with some simple graph's and data gathering.
justdo3043
I am afraid to browse your list. A couple of years ago I read that the FDIC couldn't possibly cover all of the savings account in all of the banks if there was a collapse, even with the monetary limitation imposed as to all accounts in any one bank. If savings accounts add up to an effort doomed to failure, then where do people put the money they would traditionally put in savings accounts? If people withdrew their savings, that would precipitate the very disaster we hope to avoid. No one wants to see a run on the banks. But if there is one, no one wants to be last in line either.
Just saying....
Scott, you're not alone in your thinking. A friend and I have discussed the coming collapse for 7 years now. It's taking so long because America's debtors haven't called in their bills, but like you, we knew it was coming this March and since it's so big it takes awhile for it's full impact to be felt. It's unstoppable.
You're absolutely correct that alternative energy is our salvation. Thank you. Write more good stuff like this!
Now is definitely the time to "Unplug". If ever there was a time to cancel your cable and get out of the no truth zone, now is the time. Besides, broadcast digital TV is better. The new TVs pick up the digital broadcasts using the UHF part of your old TV antenna. An additional plus is that the major networks are in High Definition.
Cancel your cable and you save $50 to 100 per month. Not only do you save some money every month, you become better informed and you do not send one more cent to Fox News!
I strongly second this! I have been saying this for months. There are enough alternative opportunities for entertainment out there - you might have to wait a while for the latest HBO or Showtime series (rent them on DVD) but they don't get stale! An easy way to save 100 a month.
SCOTT! Where you been????? We need MORE of you here and elsewhere re the political scene. Please consider doing more political writing?
I love your style and forward everything to my lists, plus I tout you whenever I can.
Can has mo please?
thanks!
legitgov.orgv.org
www.legitgov.org
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