2011/10/10

Eeyore Goes to Washington

I've been following the motley crew of misfits vying for the Republican leadership.   While almost all of them have significant achievements in their lives, I can't believe this is the best America has to offer for leadership of the right wing party. 


The followers of the Teapublithugs (as I refer to them) change their preferences for leadership more often than I change my underwear.  If you missed the news for two days you probably missed the rise and fall of another contender.


It is entertaining, but extremely unhelpful to Americans and the rest of the world, to see the American public splinter into various segments and castigate each other over differences that have no significance in the real world.  The animosity peaks during election campaigns which is   . . .  always.  America's problems are so numerous and complex that no political party or leader can have any significant effect on them.


If Shakespeare were a political commentator I think he would have reserved his following quote for American politican posturing (by either party):
It is a tale told by an idiot,
full of sound and fury,
signifying nothing.
I understand the symbol of the Teapublithugs is the elephant, and that of the Dummycrats is the donkey, but perhaps the symbols were chosen incorrectly. 


Watch the video below and see if you can detect a significant difference in content between the last 10 seconds, and that which precedes.
video

I don't hear it either. 


"Full of sound and fury, signifying nothing"

2011/08/08

S&P Justified in Downgrading US Debt

This is the third day since Standard & Poors Ratings Services downgraded US Federal Government debt, following stock market close on Friday, August 5, 2011.  Since then there has been a cacophony of screams of anguish and vilification of S & P, mostly unjustified.
I have no particular fondness for the S & P Ratings Services.  I think this organization should have been closed down due to their fraud (in my view) in rating mortgage backed securities during the housing bubble.  I also think executive officers should have been put on trial for fraud.  The same goes for the ratings agencies of Moody's and Fitch.  These three form a legal cartel of Credit Ratings Agencies (CRAs), sanctioned by Wall Street and Congress.


But they were not punished for their deception during the housing bubble, so that is irrelevent to the current debt downgrade issue.

The current Whitehouse administration and their various minions, hirelings and town criers were particularly vocal today.  Lawrence O'Donnell (MSNBC) is airing a highly inaccurate and deceptive  segment on the debt downgrade as I type.

The Chinese rating agency Dagong had downgraded US debt in November, 2010, and again last Wednesday, two days before the S & P downgrade.  The first downgrade was due to their view that US Federal Government debt was spiralling out of control.  The second downgrade was due to their view that the recent agreement on debt control was inadequate, and debt would not be contained.  Dagong's actions are widely viewed as politically motivated, but that doesn't mean their downgrades are totally unjustified.

More importantly, on July 18 the independent US rating agency Egan-Jones downgraded US debt.  This is important because Egan-Jones provides ratings information for investors who pay for this service; there is an incentive to provide realistic analyses.  Egan-Jones are considered unbiased, because their revenue source is their investor clients who want accurate and timely information.  The big three CRA cartel mentioned above are widely considered to be lackeys of Wall Street banks.

So now everyone is bashing S & P because the stock market is crashing.  Talk about shooting the messenger.  The interesting fact is that US debt is in wide demand today, despite the minor downgrade, as people rush out of stocks and into bonds.  Stocks are crashing worldwide as the credit bubble attempts to contract, while central banks pump in more money to prevent that event (possible deflationary collapse, aka "The Greater Depression").  The stock crash has very little to do with the S & P debt rating; stocks were headed down two weeks ago as Congress and the Whitehouse neared the end of their fake solution to the debt issue (see chart immediately below, click image for larger view).  Way more money has been lent out than will ever be repaid, and banks and governments worldwide are playing musical chairs trying to shift the bad debt to someone else.  Check your pension fund; that's where it's headed.

Also not mentioned in most media reports are the numerous previous warnings S & P had issued.  They have had US debt on negative watch for some time.  During the lengthy negotiations on raising the US debt ceiling S & P made it clear that there would have to be a credible plan to cut least 4 trillion dollars over the next ten years to avoid a debt downgrade.  The deal passed by Congress and accepted by President O'Bomber appears to me to be all smoke and mirrors, and putting decisions off into the future.  It comes nowhere close to a 4 trillion dollar cut, and promises of future cuts probably wouldn't be honoured anyway.

S & P sees it the same way.  US debt is spiralling out of control compared to other AAA rated countries, and there is no indication this trend will not continue.  (France's debt should also be downgraded soon according to my readings.) Therefore the downgrade is justified.  I would expect another downgrade around the second quarter of 2012 because there is a low probability of a dysfunctional Congress doing anything responsible between now and the 2012 election.

To put this into Tea Party vocabulary, think of it this way.  Suppose you're at the local sports bar with some buds sucking back on some Buds and watching Monday Night Football.  There's this annoying clown at the next table wearing an USA tee shirt and loudly whistling a Barry Manilow tune. You (wearing your S & P ball cap) lean over and mention politely that that kind of behaviour is not appreciated.

But the whistling continues.  So you lean over to whistler guy and tell him if he doesn't stop the runaway non-sanctioned whistling you will have to do something.

But whistler guy continues on, oblivious to the type of bar, the game and the fair warnings.  So you get more explicit, and issue a threat of physical violence if the whistling doesn't stop within the next minute.

Manilow guy continues so you get up and clock him.  Not a big hit, just a little open-hand slap upside the ear, just to show that you're serious.  And you stand with clenched fist letting him know what's next if he doesn't remedy his ways.  Next thing you know USA-tee-Manilow-whistler guy is running all around the bar claiming horrendous unjustified assault.  And all his sissy friends start blaming you, and want you thrown in jail.  Go figure.  After all the warnings he thinks the little slap was unjustified.

Wow!  The sell-off continues in the Asian markets.  S & P 500 futures down about 30 points after hours to 1180; gold up to $1760.  Bernanke and the FOMC ("Bennie and the InkJets") have a regular statement tomorrow; should be interesting.

In conclusion, the point of this post is that it is unfair to vilify the S & P for past indiscretions, when no-one attempted to punish them in the past.   Read the debt downgrade report S & P issued, and form your own conclusions as to whether the downgrade is justified.  I think it is.  And please, please do not form your conclusions based solely on media reports, almost all of which tend to be incomplete and biased.  I find it best to read the source information rather than rely on media spin.

And for those numerous S & P bashing hypocrites in the media today (including Prez O'Bomber), who did nothing about S & P before, during, and after the housing crash, I have a suggestion for an evening beverage:

2011/04/27

"She's Come Undun"

Shakespeare had one of his characters in a play utter the phrase, "Past is prologue."  As I understand it, he meant that what happened in the past sets the stage for current events.  And of course current events set the stage for the future.

We humans tend to learn little from others' experiences, even if the events occurred in our lifetimes.  Sometimes we don't even learn from our own experiences.   This failing allows historical themes to play out in a similar fashion over and over again, with each new generation thinking the previous has made a mess of things, and only the clear thinking and discipline of the new generation can make things better.
The last few days I have been thinking of the comedic displays that pass for politics, news, and current events in the United Suckers of America.  At the same time I have been reflecting on various recurring themes and how they have been dealt with in popular music in the past.

In this post I will connect some music primarily from the 1960s and early 1970s with current situations.  There is a saying that if you remember the 60s, you weren't there.  I was there and like to think I remember lots -- and my thinking of those events now is often quite different from my thinking as the events transpired.

This post will contain links to various videos.  Here's one that gives a refresher of some events during the 1960s.

Many artists in the 1960s incorporated the themes of cycles or circles into their music.  The band Blood, Sweat, and Tears had such a reference in their song "Spinning Wheel": 
What goes up must come down
spinning wheel got to go round
Talking about your troubles it's a crying sin
Ride a painted pony
Let the spinning wheel spin

You got no money, and you, you got no home
Spinning wheel all alone
Talking about your troubles and you, you never learn
Ride a painted pony
let the spinning wheel turn
"What goes up must come down."  Think of the NASDAQ bubble which collapsed in 2000.  "You got no money, and you, you got no home."  Think about the housing bubble that peaked in 2005-2007.  "Talking about your troubles and you, you never learn."  I see considerable whining from all quarters, accompanied with virorous finger pointing, but little understanding of, or even recognition of the underlying factors causing the pain.  "Let the spinning wheel turn."  Donald Trump, anyone?

Joni Mitchell hit the cycles theme in her song "The Circle Game":
And the seasons they go round and round
And the painted ponies go up and down
We're captive on the carousel of time
We can't return we can only look behind
From where we came
And go round and round and round
In the circle game

"We can't return we can only look behind, from where we came."  Nothing encapsulates our current society better.  Many people believe they can just go back to a simpler lifestyle, with their little patch of land, little garden, little windmill, little solar cell array, little arsenal, and 10,000 rounds of ammo. Only a very small percentage can do that.  The vast majority are tied to an energy-consumptive lifestyle that is about to get very interesting as low-priced energy disappears.

When Americans eventually find out they are never returning to business as usual, and every generation will have a lifestyle reduced from that of their parents, it is possible that violent protests and riots will again appear as they did in the 1960s.  Gordon Lightfoot used the Detroit Riot of 1967 as the theme for his song "Black Day in July".  The song was banned in 30 states.

In 2003, and again in 2006, The Dixie Chicks had their music banned on some venues as the American right wingnuts went beserk over the Chicks' comments opposing the war in Iraq.  If you missed it, think of a National Geographic special where chimps in the trees spot a leopard.  Try not to envisage the flinging of feces.  The ultra-conservative crowd prefer jingoistic nationalism as portrayed by people like Toby Keith:

You’ll be sorry that you messed with
The U.S. of A.
'Cause we'll put a BOOT in your ass
It's the American way
People like Toby Keith demonstrate why the expression "The Ugly American" will never go out of style.  His song lyrics include the combination of arrogance, ignorance, and aggression that people around the world associate with Americans.  Donald Trump has been demonstrating those three characteristics amply in the past few weeks in his fake run for the Presidency.


Way back in the Viet Nam era there was a song by Country Joe and the Fish that captured the anti-war mood of much of the American population (Woodstock live version, image slide show version).  This is truly a timeless piece.  Substitute a few words here and there and it fits any of the current wars America is in.  I particularly like these lines:
Come on Wall Street, don't be slow,
Why man, this is war au-go-go
There's plenty good money to be made
By supplying the Army with the tools of its trade,
Plus ça change, plus c'est la même chose.

Student protests against expansion of the War in Viet Nam to Cambodia resulted in the shooting incident at Kent State, as expressed by Crosby, Stills, Nash and Young in "Four Dead in Ohio". 


Today there is much more complacency among young people than in the 1960s.  Perhaps part of the reason is a sense of futility in attempting to challenge a strong corporatist state where the large corporations and governments are closely aligned, and powerful people move from one to the other on a regular basis.


I know younger people use technology devices regularly, but my observation is that the technology is employed more for recreation and diversion than as an educational tool.  The Guess Who in their song "Share the Land" asked the following questions:
Did you pay your dues?
Did you read the news
This morning when the paper landed in your yard?
Do you know their names?
Can you play their games
Without losin' track, and comin' down a bit too, hard?
My impression is that people of all ages aren't "paying their dues" by spending time researching the important themes playing out in our society.  Most people just accept at face value the misleading trivia the mainstream media publish.

Leonard Cohen showed insight into the American system with his 1988 song "Everybody Knows":
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows

Everybody knows that the boat is leaking
Everybody knows that the captain lied
Everybody got this broken feeling
Like their father or their dog just died
Yes, the American boat is leaking and Captain Obama is lying, as did his predecessors.  So are all his officers.  Lying is necessary, because the citizens can't handle the truth.  Or perhaps they still have access to tar, feathers, rails, and pitchforks.


In my opinion we are still in the early stages of what could be a two decade deleveraging process.  Almost everyone is in denial, thinking we will go back to business as usual.  We won't.  Much of our growth over the last 20-30 years was due to easy credit, which pulled forward demand for all things.  Now it's time to "pay the piper".  Substitute "credit" for "needle" in Neil Young's song "Needle and the Damage Done":
I caught you knockin' at my cellar door
I love you, baby, can I have some more
Ooh, ooh, the damage done.

I hit the city and I lost my band
I watched the needle take another man
Gone, gone, the damage done.

I sing the song because I love the man
I know that some of you don't understand
Milk-blood to keep from running out.

I've seen the needle and the damage done
A little part of it in everyone
But every junkie's like a settin' sun.
Everyone wants the other guy to be forced to be clean and sober (pay his debts).  In the meanwhile, it might be appropriate to allow me to have just one more little fix (credit expansion).  Every credit junkie's like a settin' sun.


In the meanwhile President O'bomber has proved to be a huge disappointment to many.  He is captured by the corporatists and his policies tend to be to the benefit of the corporations and wealthy individuals, and to the detriment of the citizens.  He is clueless on economics and energy issues, and as such is a collosal waste of skin in his present position.  Look at who he takes his counsel from -- some of the biggest plunderers of the American system.  It's hard not to notice that he has escalated war efforts and military spending beyond Bush's efforts.  


The sense of disappointment many have with O'Bomber might be reflected in some of the lines from the Guess Who song "These Eyes":
These eyes watched you bring my world to an end.
This heart could not accept and pretend.
The hurtin’s on me yeah,
But I will never be free no no no.
You took the vow with me yeah.
You spoke it, you spoke it, babe.
The fact is that credit deleveraging coupled with increasing demand worldwide for dwindling resources is a force that no administration can overcome.  Influence, yes.  Overcome, no.  Poor O'Bomber will leave office as President "No Hope and Change for the Worse".


Yes, America is coming undone, or "Undun" as the Guess Who spell it.  There is an idiom that "every dog has his day", which is similar to the saying about everyone getting his "15 minutes of fame".  But for nations the time period is longer.  Some historians have noted that the average lifespan of a democracy is about 200 years, after which it is replaced with some form of autocracy.  American Independence was in 1776; add 200 years (doing the Jethro Bodin carrying of the naughts in my head) and . . .  jeez, what's that awful stench -- something is past its "best before" date.  Or, from "Undun":
It's too late
She's gone too far
She's lost the sun

She's come undun
She wanted truth but all she got was lies
Came the time to realize
And it was too late
I find it both humorous and perplexing that American Democrats and Conservatives are having a major problem coming up with anything near a one percent cut in their deficit spending.  They can't cut because that will result in a slowdown in government spending which translates into a drop in GDP.  But they can't continue increasing debt indefinitely because they system will collapse suddenly if they don't contain spending.  


Americans think they have a problem.  They don't.  They have a dilemma.  Problems have solutions; dilemmas have only a choice of bad options.  In most dilemmas, the options become more painful as time goes on, and that is the case in America. 
Infrastructure is aging and maintenance has been neglected.  Every year the civil engineers give a lower grade to the state of repair of bridges, roads and dams.  Expect increased failures of all in the future.  

Americans and Canadians have a  transportation system that is heavily dependent on automobiles rather than public transportation systems that most of the rest of the world have invested in.  As energy costs rise cars become a very expensive transportation medium relative to public systems so this is a competitive disadvantage.


Everyone who has studied ecology understands that any given parcel of land and/or water has a carrying capacity of a certain variety and number of plants and animals.  Animal numbers grow from low numbers where they have more than enough food, to high numbers where there is insufficient food (overshoot).  Then the population crashes back to low numbers again due to starvation, competition, or disease.  Humans are subject to the same rules.  The lack of any national energy policy in America or Canada means that we are in for some big negative outcomes, as cheap and plentiful energy supplies give way to more expensive and less plentiful sources.


Competition for resources has been a feature in North America for decades, but it has been masked somewhat by access to cheap credit.  Over the last 3-4 decades the already wealthy have been able to collect proportionally more of the wealth than the lower classes.  The middle class grew for about two decades following WWII, then began its slow decline, accelerating downward in the last decade.  


Against this backdrop there has been a constant propaganda barrage about the advantages of democracy and free market economics.  In reality the powerful elite have ensured there is only the semblance of democracy.  And there is no free market (and never has been); the powerful use governments to slant laws to their benefit while challenging the lower classes to adapt to austerity measures.


Leonard Cohen had a catchy song "Democracy" (link is slow loading, high resolution video of recent Wisconsin demonstrations -- worth the wait while loading).  The democracy theme is topical due to the unrest in the mid-East.  I wonder how many of the citizens fighting for regime change understand that they aren't going to improve their lot in any significant way just because they get to vote for their government officials.  And do they understand that in most cases America would prefer dealing with their current dictator than an elected government?  Wealth will always be concentrated at the top, regardless of the form of government.


I would like to believe that in our problematic near future we will work towards a system where logical decisions are made to mitigate the deterioration of our society.  As Cohen put it in his rhymes:
I'm sentimental, if you know what I mean
I love the country but I can't stand the scene.
And I'm neither left or right
I'm just staying home tonight,
getting lost in that hopeless little screen.
But I'm stubborn as those garbage bags
that Time cannot decay,
I'm junk but I'm still holding up this little wild bouquet:
Democracy is coming to the U.S.A.
However, my background is such that I tend to look at the probabilities logically, disregarding personal preferences.  As I mentioned above, the average democracy lasts about 200 years and American empire is clearly in decline, just as the British empire declined previously.  And numerous powerful emprires rose and fell prior to the British.


At present the citizens of America are at each others throats like the Cripps and Bloods.  The power elite have been effective with divide and conquer propaganda, so that the populace believe they are in a political ideology struggle.  They aren't -- they are in a class struggle, and as Warren Buffet states, his class is winning.  


America is experiencing the classic shock doctrine as espoused in Naomi Klein's book of that name.  The power elite are forcing reductions in education and social programmes, while looting everything not nailed to the ground, accompanied by transfer of debt from private hands to the public.  If Stephen Harper were to get a majority government in Canada next week, we would see an acceleration of the shock doctrine here; to this point he has been able to only make moderate changes, but remarkable ones considering he has never had a majority government.


Regardless of which party is in power, I apply the Guess Who lyrics to our economic situation -- "She's come undun".