In the early aughts, Chalmers Johnson said something to the effect that the US didn't win the Cold War, it just lost it less badly. Dmitry Orlov has some observations in a similar vein, but looking to the future. Some excerpts:

By the mid-1990s I started to see Soviet/American Superpowerdom as a sort of disease that strives for world dominance but in effect eviscerates its host country, eventually leaving behind an empty shell: an impoverished population, an economy in ruins, a legacy of social problems, and a tremendous burden of debt. The symmetries between the two global superpowers were then already too numerous to mention, and they have been growing more obvious ever since.

...

The mid-1990s did not seem to me as the right time to voice such ideas. The United States was celebrating its so-called Cold War victory, getting over its Vietnam syndrome by bombing Iraq back to the Stone Age, and the foreign policy wonks coined the term "hyperpower" and were jabbering on about full-spectrum dominance. All sorts of silly things were happening. Professor Fukuyama told us that history had ended, and so we were building a brave new world where the Chinese made things out of plastic for us, the Indians provided customer support when these Chinese-made things broke, and we paid for it all just by flipping houses, pretending that they were worth a lot of money whereas they are really just useless bits of ticky-tacky. Alan Greenspan chided us about "irrational exuberance" while consistently low-balling interest rates. It was the "Goldilocks economy" – not to hot, not too cold. Remember that? And now it turns out that it was actually more of a "Tinker-bell" economy, because the last five or so years of economic growth was more or less a hallucination, based on various debt pyramids, the "whole house of cards" as President Bush once referred to it during one of his lucid moments. And now we can look back on all of that with a funny, queasy feeling, or we can look forward and feel nothing but vertigo.

...

none of these things that I mentioned have any bearing on what is commonly understood as “economic health.” Prior to collapse, the overall macroeconomic positive is an expanding economy. After collapse, economic contraction is a given, and the overall macroeconomic positive becomes something of an imponderable, so we are forced to listen to a lot of nonsense. The situation is either slightly better than expected or slightly worse than expected. We are always either months or years away from economic recovery. Business as usual will resume sooner or later, because some television bobble-head said so.

Starting from the very general, what are the current macroeconomic objectives, if you listen to the hot air coming out of Washington at the moment? First: growth, of course! Getting the economy going. We learned nothing from the last huge spike in commodity prices, so let’s just try it again. That calls for economic stimulus, a.k.a. printing money. Let’s see how high the prices go up this time. Maybe this time around we will achieve hyperinflation. Second: Stabilizing financial institutions: getting banks lending – that’s important too. You see, we are just not in enough debt yet, that’s our problem. We need more debt, and quickly! Third: jobs! We need to create jobs. Low-wage jobs, of course, to replace all the high-wage manufacturing jobs we’ve been shedding for decades now, and replacing them with low-wage service sector jobs, mainly ones without any job security or benefits. Right now, a lot of people could slow down the rate at which they are sinking further into debt if they quit their jobs. That is, their job is a net loss for them as individuals as well as for the economy as a whole. But, of course, we need much more of that, and quickly!

So that’s what we have now. The ship is on the rocks, water is rising, and the captain is shouting “Full steam ahead! We are sailing to Afghanistan!” Do you listen to Ahab up on the bridge, or do you desert your post in the engine room and go help deploy the lifeboats? If you thought that the previous episode of uncontrolled debt expansion, globalized Ponzi schemes, and economic hollowing-out was silly, then I predict that you will find this next episode of feckless grasping at macroeconomic straws even sillier. Except that it won’t be funny: what is crashing now is our life support system: all the systems and institutions that are keeping us alive. And so I don’t recommend passively standing around and watching the show – unless you happen to have a death wish.

From Reuters via TPM: Picks for 2 high U.S. Treasury jobs withdraw

Two top contenders for senior posts at the U.S. Treasury have withdrawn, people familiar with the moves said on Thursday, dealing a blow to Treasury Secretary Timothy Geithner's efforts to build his staff to fight the financial crisis.

Former Securities and Exchange Commissioner Annette Nazareth withdrew from consideration to become deputy Treasury secretary for personal reasons to remain in her private securities law practice, one of the sources said.

Caroline Atkinson, Geithner's choice for international affairs undersecretary, also has withdrawn. Atkinson, a senior official at the International Monetary Fund, has decided to remain at the institution, a person familiar with the decision said.

Both Nazareth and Atkinson had been vetted for the jobs but were not formally nominated for U.S. Senate confirmation.

Have you, like me, been constantly checking the web for signs that O'Bannion will finally figure out that he is sabotaging himself and ruining everything by flushing money down the bank/insurance toilet? Have you been reading the tea leaves for some hint that eventually O'Burt will push for nationalization, the opening of the bank books, and the wiping out of false assets so that lending can finally resume and the stimulus has some possiblity of catching hold of the economy?

If you have, then I think you can stop. I think it's done. We should stop hoping and wasting time looking for good signs and start preparing for new mountains of shit to fall onto O'Bill's Treasury fan. Hunker down.

Here is Simon Johnson, formerly of the IMF:

Emerging market crises are marked by an increase in tunneling - i.e., borderline legal/illegal smuggling of value out of businesses. As time horizons become shorter, employees have less incentive to protect shareholder value and are more inclined to help out friends or prepare a soft exit for themselves....

This is the prospect now faced by the United States. Treasury has made it clear that they will proceed with a "mix-and-match" strategy, as advertized. And people close to the Administration tell me things along the lines of "it will be messy" and "there is no alternative." The people involved are convinced - and hold this almost as an unshakeable ideology - that this is the only way to bring private capital into banks.

This attempt to protect shareholders and insiders in large banks is misguided. Not only have these shareholders already been almost completely wiped out by the actions and inactions of the executives and boards in these banks (why haven't these boards resigned?), but the government's policy is creating toxic financial institutions that no one wants to touch either with equity investments or - increasingly - further credit.

Policy confusion is rampant. Did the government effectively sort-of nationalize Citigroup last Thursday when it said Vikram Pandit will stay on as CEO?... Will debtholders be forced to take losses and, if so, how much and for whom?...

Drip-drip injections of government money are not a proper clean-up; there has been no complete recognition of losses and, almost six months later, that company still cannot move on. Time horizons presumably remain short or are getting shorter for all involved. This points to a bleak future more generally....

The course of policy is set. For at least the next 18 months, we know what to expect on the banking front. Now Treasury is committed, the leadership in this area will not deviate from a pro-insider policy for large banks; they are not interested in alternative approaches (I've asked). The result will be further destruction of the private credit system and more recourse to relatively nontransparent actions by the Federal Reserve, with all the risks that entails....

Sweet fucking cut.

Nice.




h/t Urban Prankster

Obama, get rid of these guys already. You have to accept that there are some rich people you just won't be able to save.

Dear Leader:

Now, I know I've had a good time this week dogging these people for their ridiculous conventions and "tea party" protests, but let me switch gears and double-back on my own side for a second. Now that Rush has got everyone on the right openly hoping for Obama to "fail", everyone on the left is falling over themselves with outrage over such perfidy. Excuse me, but I'm going to call bullshit, like you didn't hope Bush would fail miserably, I know I did...mission accomplished. Like you didn't want to vomit every time some TV-approved "liberal" would couch any criticism of Bush with, "Well, I support the President and our troops...etc., etc." Of course they want Obama to fail, it's their right and duty, if he succeeds they will die long before the right-wing even sniffs power again in this country. Do we really need to pull the patriotism card? Fuck patriotism, that's their bag, and I'm more than happy to let them dry hump Uncle Sam all they want. In every other country in the world patriotism is called "nationalism" and every civilized nation on the planet has learned to hate and fear it with every fiber of their being.

I'm glad that the right-wing is sowing their wild oats now that they're out of power. Now that they don't really control anything, their wild-eyed protests against "socialism" and talk-radio wank sessions have ceased to be scary, and are now just amusing, and a little sad--like watching retarded children. Most people on the right are on the right because of a failure to rebel against authority, usually a parent or some other equivalent authority figure early in life. The right-wing can largely be explained by this primal failure. Indeed, I think one of the reasons "the sixties" remains such a bogey-man for the right is their palpable and manifest jealously over all the fun other people had. So I'm thrilled that they're getting out into the streets with bull-horns and home-made signs in hand, openly condemning their democratically elected government, along with more than half of their fellow citizens, and pledging to resist, subvert, undermine authority, and re-create '68 all over again. It's a start. I'm hoping that when Obama busts his Commander-in-Chief cherry in Afghanistan or Pakistan, that Rush and others will openly hope for defeat and dishonor on the battlefield, I know I am.

UPDATE:

Hah.

Dear New York City friends,

Today I am launching a campaign for Mayor of New York City. Our campaign will be devoted to nourishing and strengthening our common wealth, our city's heritage, our lovely parks, roads, streets, neighborhoods, and the people who live in them. This city once belonged to us, and it will once again.

...

I believe that the current mayor considers New York City a corporation. This is a natural tendency for a Wall Street guy. Parks, libraries and schools, for instance, are viewed as not worthy of public support -- they must be privatized to pay their own way. This creates a snowball effect, in which our public commons is sold off to the highest bidder. The roadways are a disaster, certainly this is true in the neglected boroughs, but roads are a burden to this mayor, not an asset, and so they are ignored.

Rev. Billy

Got my vote.



via joshr

link

But I gotta say the news on the financial bailout is disappointing. The Obama administration is clearly going very easy on Wall Street. The much-hyped stress tests aren’t much of anything at all; as a Citigroup analysis put it on Thursday, the tests aren’t onerous and the overall plan looks very bank- and investor-friendly. They’re doing everything they can to avoid nationalizing these busted institutions, and even when they pump money in, as they did with Citigroup the other day, they do it with few obvious strings attached. We’ll know that we’re really in a new era when the administration’s approach becomes a lot less indulgent. Justice requires that, but so does economic recovery.

The outlines of the first draft of Obama’s first budget, though, are more encouraging. To start with, it’s an honest document, which brings the cost of war onto the budget, instead of being covered with the phony emergency resolutions that Bush preferred. Raising taxes on the very rich is a good move. It’s good to see some serious action on greenhouse gas emissions, though I’d much prefer a carbon tax to a cap-and-trade system.

...

The health care fund, $630 billion over the next decade, is a nice gesture, but it’s still not what we really need, which is a single-payer system. We’ll hear more on this from David Himmelstein in about 25 minutes, but single-payer is the only way you can get universal coverage and cost control, because you get the parasitical insurance companies out of the picture.

...

Putting all this together: the budget looks like bigger than baby steps in the right direction, the first serious signs at the fiscal level of a reversal of the priorities of the last 30 years. But only a beginning. And it has to get through Congress.

I should add to this that there will be a lot of inside baseball talk of this sort in the future about crafting healthcare legislation and all the players and their various agendas. It should be kept in mind however that there is perfectly good single-payer legislation already crafted (H.R. 676), and that it's likely that this will be systematically left out of the debate as per Luke Mitchell's piece in Harper's.

I've seen it suggested that Obama is somehow paving the way for single-payer by slipping this current round of reforms into the budget instead of a bill. Budgets only need 50% + 1 while bills like H.R.676 would need a 60% majority. It makes sense to me that Obama would want to get as much in at the moment without creating a blowout fight over it, but I don't see at all how this prepares the ground for single-payer. If anyone can explain that to me, I'd appreciate it.

If, however, this once-in-a-generation opportunity to restructure the healthcare system is squandered on "reforms" that leave the insco's intact, then that would be a crying fucking shame and an epic FAIL. As far as I can tell, it looks like that's what's happening.



Plus: more of the FUTURE

Good speech! Good budget! Good attempt to slow down Middle East conflagration!

Now if we can just get him to not flush the entire U.S. Treasury and the whole global economy down the toilet, we'll be in business!

...the high cost of borrowing and of servicing existing debts is crippling companies and forcing them into bankruptcy and layoffs. It is these high borrowing costs that are causing home foreclosures to balloon upwards. Each day inflicts more damage - on the economy, on society, on families and on individuals. And each day the stock market shows its lack of patience with an administration prevaricating over the economy.

The Fed is the slouch here -- dragging its feet. Fed Governor Bernanke needs to urgently get all borrowing costs down -- for companies as well as households; for risky as well as safe loans. At this stage of the economic cycle, very few loans are without risk. And if businesses and entrepreneurs are to take the risks needed to pull us out of this crisis, they need affordable finance. The Fed can get rates down by applying the policy of quantitative easing far more aggressively.

And then there are the banks. Collapsing banks can't wait while Treasury embarks on a painstaking and punctilious "stress test." The stock market knows what Treasury still needs to admit: the banks are bust. Their CEOs lack all credibility. Until they are nationalized the Dow will continue its very rational path downwards....

The economy cannot wait for the president's patient building of bipartisan agreement. Those congressmen and women that cannot grasp the gravity of this crisis need to be sidelined. Millions of unemployed Americans can't wait while Ben Bernanke, Tim Geithner and Larry Summers learn from the mistakes made by Japan in the 1990s. Millions of homeowners can't wait till economists unlearn the dogmatic and misguided theories of Ayn Rand, Milton Friedman and Paul A. Samuelson.

See here.

Or, perhaps, of everything.

I came across this recent account of a service at a mega-church in Sydney, Australia:

...There were no limits to the professionalism of this worship service. There was even a bit of product placement: the lobby was adorned with a lovely suite of iMacs; and the sermon was delivered from behind a lectern with an open MacBook on top, its illuminated Apple icon gleaming at the cameras...

As for the preaching, it was motivating and highly inspirational: the sermon’s title (sorry, I’m not kidding) was “Ten Kinds of People That God Can’t Help.” The main idea was that you should “invest” your time in positive happy friends, instead of making bad investments in friendships with hopeless, unhappy people: “Why are you trying to help people like that when even God can’t help them?” The sermon’s best one-liner: “The Bible isn’t a book about God’s love for man; it’s a book about man’s love for God.”

But for me, the most interesting aspect of the service was the dominance of the screen. Every moment of the service, from start to finish, was broadcast on to huge screens around the auditorium. When the pastor spoke, he would address one of the many cameras. When the worship-leader spoke to the congregation, he would speak into the camera. Even the heartfelt altar call at the end of the service was addressed to the camera. During the worship songs, the screens would be filled with the faces of those gorgeously happy singers and musicians; then a camera would pan across the crowd of raised hands before cutting back to a shot of the worship-leader’s face, full of adoration and passionate sincerity.

What made this so interesting was that the songs’ lyrics were also superimposed over these images; so if you wanted to join in singing, you had no choice but to turn your face away from the altar (if there had been an altar), away from the congregation, even away from the flesh-and-blood performers on stage. In short, participation in worship was possible only through the mediation of the screen. The entire worship service was orchestrated primarily as an event of the screen, so that one could take part only by turning towards the screen and participating in its projected images of worship....

At this morning’s service, even the worship leader himself was not a direct participant in the worship event – the real worshipping subject was his onscreen image. The flesh-and-blood performer participates in this worship only indirectly, through a vicarious participation in his own projected image – a larger-than-life image which becomes the bearer of transcendence. Similarly, the congregation is involved in worship only vicariously, through the mediation of the screen. This is an instance in which the screen comes to possess more ontological depth than the flesh-and-blood world itself; the projected image becomes “more real” than reality...

More here.