I want to take you back, way back, to January 2008, when we here at Soapblox began to warn of a coming economic crisis of scary proportions (no joke, read the article). It was obvious to me then that the Go-Go 90s had sputtered and faltered under Bush’s handouts to the rich, 2 full-blown guerilla wars in Iraq and Afghanistan and a blind eye toward Wall Street. Yet it was only getting started! Pretty soon the Wall Street Masters of the Universe cowered in fear of what was to come, the Automobile Industry would face certain doom and the banking system faced complete and utter collapse!
Banks were swallowing each other to prevent runs (just ask JP Morgan Chase and Bank of America). Wall Street firms like Bear Stearns completely collapsed and the Mortgage Backed Security scandals rippled through the lives of pirates and plunderers everywhere, soon to hit Middle America, as Capitalism itself sat on the abyss.
I watched friend’s lives transformed, my family’s life changed and as my prediction kept me close to a family business, there were a few big long moments when we all began to think the whole damn thing was going to collapse! It was in this chaos that the Presidential Election blinded America to Bush’s final desperate and foolish actions. Bush bailed out the Auto Industry with a huge handout (destined to return the problem to Obama 6 months later) and saddled him further with the largest bank bailout in history, with a commitment of over $1 Trillion, half of it with no strings attached. Obama would reign in the rest and force government investments into the auto and banking industries, demanding interest where they could. Nothing could be done for the Bush handouts though.
The election gave people like us, who watched the country bleed under a Republican Presidency, a little hope. This was tempered by Obama’s inauguration address where he warned everyone that what was coming would not be easy. America heard it but it did not listen.
Then, when the Democratic President was firmly in the Oval Office, came the cry of “austerity” from the Radical Right. The Tea Party was born on the floor of the Chicago Futures Market and broadcast on CNBC to cry about taxpayer dollars going to bailout home owners who were irresponsible. The cry came conveniently after the 2008 Bank Bailouts and seemed to forget about the Trillion Dollars the banks swallowed up. They demanded their country back and yelled at banks and elites while arguing to give the banks and the plutocrats who run both them and the country even more power! Then they forgot all about the people who started the crisis and focused on the debt the Republicans left in their wake. They never shut up about cutting spending, while Obama was trying to put in place a massive infrastructure program that would have given the nation High Speed Rail, an advanced medical records system, health care for all, new bridges, new roads, new highways and a modernized electrical grid based more on solar and wind. It could have been a million jobs.
China followed this path and today they are still growing their economy. Americans decided to start caring about spending after years of following Bush and Cheney who literally declared that “Reagan proved deficits don’t matter”. Then, all of a sudden, conservative Republicans demanded huge cuts in spending for the people, to Food Stamps, to Social Security, to Medicare, while arguing for more money for defense and less regulations and no strings attached for the bailout money on Wall Street. Obama got a fraction of what he wanted as a result. Too many conservative Democrats cried (like Ben Nelson and Lieberman who was technically independent by then and McCain’s top pick for Vice President) and wrecked too many bills to count. Republicans sat on their hands and hoped for Obama to fail. McConnell even declared it over and over again!
It didn’t work.
Obama’s Stimulus was weakened but passed. Ben Bernanke had to fill in with Quantitative Easing, a convoluted mess of bond purchasing by the Federal Reserve (which Ron Paul incorrectly predicted would lead to rampant inflation). Holding back austerity from the newly elected Tea Bagger Party in 2010 (when ungrateful Americans forgot to do their part), was the single most important legacy that Obama held to.
The European Depression
The 2008 crisis caused Europe’s Liberals to largely be voted out and replaced with conservatives who pushed a huge austere program of cutting government spending. Since then, austerity has proven an absolute disaster.
Cutting government jobs led to less money in the economy which led to less private sector jobs. The currency was left to the free market (in other words: stupid conservative tinkering) that resulted in stagnant growth. American conservatives cried about Greece and Italy (because their banker overlords were worried about losing precious money they sunk into bad investments) yet the banks being all dickish with the debt repayment (a tactic they have been using in Latin America for decades) helped to tank the economy worse, sent Greece into political chaos with rampant riots, scaring away tourists, causing more problems. The downward spiral some conservatives predicted happened almost did happen BECAUSE of what they advocated for, (a little side note: they predicted the same would occur in California which today has a balanced budget and a growing economy).
With conservatives like Andrea Merkel in German dominant in the EuroZone, austerity was pushed. When France ousted their conservative playboy Sarkozy for a socialist Hollande, the German PM refused to play ball. Austerity won out as the official policy, even in the United Kingdom under PM Cameron who sent the country into a period of riots that once cornered the Prince of Wales with cries of “off with their heads”.
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After a few years, things settled down. People began to wait patiently for the economy to recover. It didn’t. Then last year, the economy went back into recession and shrunk and is continuing to do so.
The Washington Post compared this recession with past recessions, even the Great Depression from the Silver Bloc backed currency countries (British Empire) and the Gold backed ones (most of the rest of Europe). Even in the Great Depression, things had begun to recover by now, not recess. If this trend continues, it may be the worse economic crisis in the history of Modern Europe. That is why the Washington Post declared the EuroZone crisis a Depression, even if it doesn’t match the depths of the 30s, the currency is collapsing, the ship is sinking and the policies of austerity have proven an utter failure leading to speculation that even worse, potentially much worse times are ahead.
Not Good for Anyone
Make no mistake, even if this proves a lesson that I firmly believe we as a people need to learn, a European collapse does not just break my heart (I traveled abroad to Europe not long ago), it threatens to negate the whole lesson. If Europe collapses, we will all be dragged down with her. This will cause an American economy to collapse. The ironic thing about this is that an American President has been suffering from a weak European economy and the failures of conservatism. Conservatism has been dragging Obama down at home and abroad, sinking the economic recovery. Don’t believe me, look at what they are saying about China.
If it is bad for China, according to the Wall Street Journal, it’s more than likely bad for us (since the commie fearing bastards now want to make America into a giant Chinese corporation!)
Another issue is that China had been artificially ramping up their economy with Keynesian economics. Read this recent article from a conservative business publication from Austrailia that credit’s China’s Four Trillion yuan stimulus package for saving their economy as well. Don’t know how much a yuan is worth? Well 4,000,000,000,000.00 CNY (Chinese Yuan Renminbi) is worth $642,107,342,963.49. That is 642 billion dollars, no tax cuts, all infrastructure spending, including a massive high speed rail program, new buildings, new cities and even a massive military upswing, but mostly infrastructure (China isn’t stupid).
However, pumping cash into infrastructure. The lesson learned from the FDR years of the New Deal during the Great Depression is that this can only work for so long. Hitler’s Germany tried a similar tactic and it made the economy boom till the debt’s came in the mail, then it was time to invade Poland. It’s a blood transfusion and it only works if the patient stops bleeding. World War II definitively proved it. China grew too fast, and the “Communist” Parties attempts to engineer a soft landing of a huge boom are starting to hit the hard reality of, well… reality. If China falters, we are all in for a storm, but if the US falters hang on to your hats and glasses folks!
Despite the popular late 90s and early 2000s lingo of “decoupling” which meant that China, Japan, Europe and Brazil, etc. would soon be able to exist without the rest and namely (by US capitalists who got a huge kick out of kicking their own nation in the teeth, us, meaning the U.S.), we all seem to be in a symbiotic relationship. You never hear that word anymore, “decoupling”. What a stupid theory! There is no sterile environment outside of a laboratory, thus the need for a lab in the first place. We are all in this together folks! We all live in a wild spaceship called “Earth”.
Economists don’t seem to get very much right. This is made worse by the common practice of economists to present two directions. Sometimes called Greenspanisms or (Greenspasims) whatever from the 90s economist that was once, before 2008, hailed as a hero. Today, his name is rarely mentioned in any positive context. Especially negative by his predecessor Paul Volcker, who helped engineer the boom in 1980s America and endorsed Obama in 2008.
Greek, Spanish, Italian, Irish Chaos Caused by Capitalists
I argued with too many of my fellow Americans to mention about how the selfish drive of the banks and conservative capitalists in German, England and America was not about saving the economy, more, about saving the banks. This argument is proven today, as austerity programs have gone into effect to pay back the selfish banks that tanked the world economy, who seem largely unconcerned about where Greece, Italy, Spain, Ireland, Iceland, France, Germany and even England are today.
The Euro is in massive trouble. Though don’t worry folks, a bunch of self-righteous, elitist bankers have turned a communist, meaning not as stupid as the US in allowing regulation to only favor the rich, nation into a wonderful place where the suckers are just dumb enough to keep their banks alive at great sacrifice.
We Americans don’t even care to demand an interest rate that makes their investment in the bank even worth it!
When I was a kid, my mom took me down at age 5 to make my first bank account. I got $5 for every $100 I had in the bank every month! Today I would be lucky to get hundredths of a penny and making any money in the banks, even in CDs or other so-called investments is so much a joke I don’t even know if I should cry or laugh.
The system is rigged and you and I don’t get to reap the rewards. Greek problems were only a concern when the banks worried about potential bonuses and annual retreats. What’s the annual retreat without an HD Diamond and Ruby Peel after your Evian Bath. If you think I am lying, see picture below, that is real!
Silly poors. Oh muffy I do believe I made a funny. Silly pores and all. Yes, uhm, move along poors.
So many conservative populists, which is clearly an oxymoron, (and not a joke about pores) fight for the right of the people, if the people were all rich asshole bankers. They may wear a cowboy hat and claim to be a plumber or whatever, but they aren’t even oxymorons, just morons, because there is no irony in being an idiot. As if capitalism was anything more than a manifesto of the rich in the first place. Dumb ass!
So many of these good honest folk fought for austerity, claimed it was the second coming. They called all those that disagreed with their inevitable proof of rightness too many names to count. Greece and Italy and Spain would prove something that never happened. They wanted all the same things here for us. Obama was the only thing that held it back.
Now that they are clearly wrong they are strangely silent. Yet no less wrong!
In my opinion, that makes them more wrong because they need to be called out. This isn’t just the weather being wrong, they still want people kicked off of food stamps, mothers kicked off of welfare, people kicked off of disability, seniors kicked off Social Security and Medicare.
Can you imagine! If we had ended up with President McCain, we may very well be in a depression too!
Thankfully we voted out the Republicans who were crying for austerity, wanted GM and Chrysler to fail like Mitt Romney, wanted to give handouts to the rich and cut Social Security and Medicare.. Instead we got a stimulus that was too small, which forced a Quantitative Easing by Bernanke (that many like Ron Paul said would lead to run away inflation and didn’t) which ultimately saved us from the fate of Europe. Smaller growth means a smaller bust historically as big booms tend to lead to huge busts. I suppose we will find out.
The funny thing is though, most of the people running the economy today understand it as well as scientists understand the creation of the universe: they have a pretty good idea how it works but really in the end know nothing for sure. This is made worse by so many people in the upper strata having gone to school 50 years ago and have retained the outdated “supply and demand” logic that is misplaced in macroeconomics. To top it all off, the big corporate powers are all in these upper strata positions. So regardless of even knowing how to fix it, so many people are loyal to places like Morgan Stanley and Goldman Sachs that personal interest interferes in the first place.
The lessons of Europe’s failure though should stay with us. Austerity is one of the dumbest theories ever dreamed up and firmly establishes the intellectual idiocy of the conservative movement. Austerity is a proven, absolute, failure by numerous experiences in the real world. Meanwhile on the opposite end, robust government spending, like what went on in China seems to be a partial success. We in the US walked the middle line and we seem to be recovering after a measured period of suffering that no way meets the Great Depression or the European Depression of the 21st Century.
Somehow, though, we seem to live better.
Conservatives have been pointing out lately that “the poors” have video games, so they must be living it up because, having electronics makes you as rich as people who control the media and dominate life for billions of people.
So if the “poors”can afford video games, than get ready to have your mind blown.
Recent American transfer Yasiel Puig proved he was a great gamer by showing that he had an NES (Nintendo Entertainment System) from boyhood. So that means Cuban Communism isn’t as bad as the people say. If being poor isn’t that bad, and the commies are living it up, than communism isn’t a failure by their own logic.
I’m pretty sure they don’t know Adam from Eve nor apple.