After Friday's astonishing lows, the markets really shot its load today, just crashing through any of the support levels that anyone imagined existing just a week ago. Meanwhile, we (i.e., us Americans) are throwing another $30 x 10^9 AIG's way. As the Dow approaches 6000 and the S&P 600, the meltdown of our economy appears inevitable, without even the remotest suggestion from Washington that the bailouts will even be rethought, never mind end anytime soon. This is working out more serendipitously than Obama could have ever dreamt.
What, you say, I'm crazy? Why would the president of the United States want to see his nation's economy implode? Why would he wish to see his grand plans for a greener, more educated, more health-insured, more economically-just America jeopardized by its going bankrupt?
Now I'm not saying this is part of some grand plan. I'm not even sure Obama realizes what's happening. But clearly he does not consider imploding markets a cause for concern. As far as he's concerned, he's already taken care of that. He signed an $800b stimulus package. He's proposed a budget to vastly increase spending on education - we all know that education pays for itself multiple times over (sometimes 10 times
!). And of course all that energy "investment" in the budget - that will solve our industrial problems.
So this market-crashing stuff is just a temporary distraction - a bunch of rich whiners throwing a little tantrum. Besides, if things don't pick up as expected, we can just throw another $800b out there. The only real danger to the economy right now is that people are trying to save money - that's always been the problem, in fact, all that net worth greedy people like to build up, which only serves to further disadvantage those who have a different approach to personal finance.
Standing stalwart behind the president are the titans of the media. To help sell his prescriptions he can count on the New York Times, Washington Post, Time, Newsweek, NBC, CBS, ABC, CNN, and NPR. These organizations - and many more across the country - will be certain not to let a single credible, skeptical voice intrude on their cult-of-Obama storylines. To be sure, they will talk to various Republican and pseudo-conservative tools who blabber on incoherently about tax cuts and saving the housing market. But they won't talk to a single person who will actually discuss what's actually wrong with the financial system and what must be done to set it right. As far as the opposition like Fox and WSJ? See the above re: tools.
Indeed, the stars couldn't be more perfectly aligned for the triumph of Obamanomics. The market crash is wiping out people's 401k's as well as any pensions that might still be out there. Then between the stimulus package(s), the various bailouts and the super-budgets, the dollar will be next to dive as neither China nor Japan will be able to afford to fund them. This will serve to wipe out whatever cash savings these saps will have attempted to protect. Ownership of gold, of course, can simply be declared illegal.
And so with existing savings effectively wiped out and further savings impossible (due to their being no safe place to invest), Americans will have no trouble funding Obama's dreams. Yes We Can indeed. The persistence of a few huge zombie banks, completely dependent on the Obama administration for their existence, will provide the streams of "capital" to fund administration-approved "private" ventures - the various health "insurers" and green "entrepreneurs" that will spring up in Obamaland. Any income that might have been dumped into savings in the past will now be redirected to "investments" in education and infrastructure. (Can I use any more scare quotes?)
Granted, this was not Obama's precise plan back when he and David Axelrod decided he should become president. Obama envisioned that as POTUS he could harness this incredible wealth-making machine that is the USofA to accomplish all the things he would have liked to have accomplished as a community organizer if being a community organizer didn't totally suck. You know, like back when he was still talking about how "white folks' greed runs a world in need
". So what to do when the white-greed machine blows a serious gasket? How do you redistribute money that's disappeared?
Well, for one thing, there isn't so much inequality anymore. The meltdown is much harsher to those with positive net worth - they've seen much of that disappear. If you have no savings, you've got nothing to lose. If you bought a house you couldn't possibly afford, and you had a crappy credit rating to begin with, you walk away. That helps. But if you can keep insolvent firms operating with bailouts, you can then also control the disposition of their revenues. Favored constituencies can continue to get "loans" regardless of ability to pay, salaries can be capped (or reduced by eliminating bonuses, which are really just a variable salary component). Private firms looking for funding will also need to play by the rules, such as locating in the right places, hiring the right people, supplying the right amounts to right locations. And why not?
You can't really argue that America's resources have been well allocated over the last 20 years. Who's to say that Obama's ideas aren't as good as anyone else's? All those quants working on Wall Street were not just wasting their talents - they were being used to wreak havoc. Put them to work developing new energy sources, designing mass transit systems, or send them off for a year of community service in the cities. And the rest of us not-so-mathematically gifted technocrats? The new age will have lots of rules and will require careful management - there's a vast bureaucracy to man (or person). We still need to work, only we'll just have to work a decade or two more than we might have thought. But that's okay - we'll have lots of vacation time, and there will be lots of part-time jobs.
So, as you watch the markets collapse, ask not why Obama doesn't do anything, but why should he?
Labels: Economy, Meltdown, Obama