Put your raygun to my head...
Like Henry Darger putting newspaper scraps, coloring books and his abortion of a life together to produce the great interplanetary apocalypse through which the Vivien sisters ride, forever, to his rescue, and forever fail to reach him –I too combine my ashcan life, scraps of newspaper stories, and tags of song lyrics to wall paper the zona.
It is Easter. I should be jubilant. I am jubilant in a way. I am, however, beginning to realize myself that the zona will be here for a while before anyone really gets it. Gets the implications. The newspapers reflect an elite relief that the zona is over – for our masters once again have been sniffing the glue. Thirty percent of the wealth of the median American household was wiped out last year, unemployment, including those who have stopped looking and those on part time, is well over ten percent, manufacturing is crashing globally, and housing prices – that cancerous indice of the Great American nexus, where cars proliferate, lawns grow smaller, power needs grow bigger, and unnecessary space just fits the unnecessary extension of the tv screen, that death in life of sit com soul death given that hi def gloss – is still a death trap for the incomes of millions.
On the other hand, the elite are looking at a buying opportunity in stocks – the Geithner plan has made Wall Street confident that, if there is no bubble for the common man, there will be one for the wealthiest – and spring is here.
Of course, when our masters are at their wit’s end, they have one reliable word. I hadn’t heard it until today. Oh joy, the word finally cam out. The word, war.
Americans love war. They love it because the opposite of war, for them, is not peace, but chaos. There are the drugs, for instance, getting snorted or shot or smoked and causing music and underground comics, and there is the war on drugs, which makes it all so clear: the only solution must be to throw millions of people, mostly of course black people, into jail. The angels came back to earth, and started DARE, and just say no, and zero tolerance, and chaos was mastered. Meanwhile, of course, the compassionate heart of big pharma was infinitely moved, looking down at suffering whiteness in the suburbs and ordered up, toute suite, mood altering drugs for the good people. And lo! They sold them just as the stereotyped pusher sold your first sweet pop of heroin, with free offers from your local GP. War is so good.
So it was a neo-lib from Princeton, Alan wtf Blinder, former Fed Reserve governor, who has loosed the dogs of war. He frankly admits to a moral quandary. Three million people have died in Congo’s wars in the last six years. Two million people will die of malaria this year, and the amount spent on finding a cure for malaria might be all of one hundred million dollars. At least two billion \people make do on a couple dollars a day. Thus, it would seem odious, it would seem to be a crime against humanity, for the world’s wealthiest country to spend two, three, four trillion dollars propping up the people who make more in a day than most villages in India make in a lifetime. How can we explain this quandary? How can we even explain that the money being spent will do squat for most of the people in the developed world, but will certainly limit their ability to get health care, or to solve the problems associated with environmental disaster.
Theere’s only one solution. This is “financial war”. Oh Jesus, Mary, and all the Saints!
In the bubble era, even sophisticated people deluded themselves into believing that home prices would soar indefinitely and that lending risks were minimal. On those weak foundations, a huge house of cards was built. Wall Streeters designed a hideously complex financial system to enrich themselves. Financial institutions took on far too much debt. People signed mortgages they could ill afford and did not understand. Regulators, the Bush administration and Congress looked the other way. The bubble grew until it burst.
Much of this shouldn’t have happened. But we are where we are, and the urgent priority is to extricate ourselves from this mess as quickly as possible, with minimal damage. Here’s how I conceptualize the master plan.
American policy makers are fighting a two-front war.”
Of course they are. It is a war! But what kind of war? Why, this war, this time, is a two front thingy. You might think it is just one front: greedy monstrous kleptocrats fighting to decimate the Treasury, which is commanded by the assistants of greedy kleptocrats. But no! We, we, I weep to say, are in this thing too!
“On the eastern front, they are battling a shortage of demand, as traumatized households and businesses pull in their horns. Less spending by some people means fewer jobs for others who, in turn, curtail their own spending.”
I’m stirred. Now, of course, perhaps this spending – the only function that Blinder sees the households doing – goes along with, well, producintg. Which goes along with production. Which goes along with who seizes the profits coming from the increase in production. But that would be the wrong, just the rillly rilly wrong way to see this war. You see, in war, there are the privates, who live in the labor market. Their wage is determined by competition. But then, there are the upper end people. The CEOs. Magically, here things change. These people are hard workers. They are star workers. The work they do is measured not by how cheaply they can be got by some damn labor market, no – they are responsible, don’t you know, for the profits that companies accrue. And they are even more responsible when a company doesn’t accrue a profit – then, captains of the ship, they steer their companies. Steering, fighting, starring – all in a day’s work for this doughty crew, the last sector for whom the neo-classicals believe the labor theory of value is true and good. But now, they are generals!
“The western front is vastly more complex. All economies run on credit, and ours developed an extreme dependency. Largely through their own failings, banks have been seriously damaged. Bankers are paralyzed by fear of further loan losses and shrinking capital that might subject them to regulatory penalties — or worse. One way or another, the banks must be restored to health and emboldened to lend.
How? The Fed has made huge loans to banks and flooded them with cash. But the banks also need capital, and private money is not stepping up to the plate. That was why Henry M. Paulson Jr., the former Treasury secretary, decided to devote the Troubled Asset Relief Program to injecting capital into banks last fall. I disagreed with both his decision and the way he executed it. But there was a rationale for what he did, and the current Treasury secretary, Timothy F. Geithner, will eventually be back for more money for this purpose.”
That is a fine, fine war story. There were failings, one notices. Failings are human. But they can’t lead to like failure.
And here is pretty much the war plan. As Tim Duy has written, as I have written, the plan is to go back to 2006. Blinder even wants, o miracle of imbecility, to restore the shadow financial system!
“But banks are just part of the problem. Much modern lending is securitized by the so-called shadow banking system — a complex web of interlocking, sometimes mysterious capital markets. Invisible to most people, it is crucial to getting credit to mortgagees, credit card holders and businesses. And while the financial implosion wounded the banks, it decimated the shadow banking system.
The most obvious — but not the only — disasters stem from mortgage delinquencies, fears of more, and consequent uncertainty about the values of mortgage-related securities. Bringing these markets back to life is one rationale for both the administration’s foreclosure mitigation programs and its public-private investment programs. It is also a principal rationale for many of the Fed’s unprecedented lending and money-creation activities.”
At least we know one thing: elite wars always fail. The war on drugs, the war on terror. The war on cancer. I’m confident that the only way to bring the shadow system back is to institute measures that the Government is still probably a bit afraid of – for instance, police raids on neighborhoods in which the police gather all portables and pocket money and deposit it in the accounts of the megawealthy. And even that has a limited time span.
War, the dino cried. But these flesh eaters, these soulless raptors, don’t know the meaning of war. Not like the Vivien sisters and me.
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