Matt Taibbi's reaction to
the ZeroHedge story with regard to Turbo Tim's lifting of the government
support on Christmas Eve for the GSE's was exactly my own. You can read it in
its entirety here.
What he does not overtly say is that this is class warfare, and it is
becoming worse in the US than at any time since the 1930's. And the outcome
of this will be a fundamental test of the US commitment to its republic.
The media stokes the viewing public into emotionally-based and virulently
distracting arguments about liberal versus conservative, while the gentried
class skins them all alive.
One only has to watch the 'news shows' on American television to see the lack
of real content and discussion, with diametrically opposed 'strategists'
hurling sound bytes at each other with all the depth of a schoolyard
It is comfortable to retreat into an view of the world, and the noble class in the States
is all too ready to facilitate that appeal to the darker emotions. People
know deep down that it is a scam, and believe that it is easier to go along
and get yours while you can, than actually attempting to change a system
grown corrupt in an aging empire.
This explains more than one might imagine. Why do the economists continually
excuse outrageously unsustainable economic behaviour and financial systems
that are as productive as games of chance? Why do some media outlets
obviously take sides and pander to the worst biases in their viewers,
supplying them with easy reflexive answers to any suggestion that something
might actually be wrong? Why do adult people fall for this and regress to
childish name calling so readily?
It is because they are afraid. They know the system is broken, that the
country is in for hard times, and that the work of reform is going to be
difficult and painful. It is so easy to adopt whatever red or blue meme,
whomever you think is going to deliver undeserved wealth to you, or at least
safety and position. As always look for a fallguy, some identifiable and out
of favor group. The search for scapegoats may be be violent.
At turning points such as these, when the time is right, a 'great man' will
stand up and many will follow. Who will it be, and what principals and
principles will they represent?
Obama was such a one, but
he is obviously like the character of Robert the Bruce in the movie Braveheart, or perhaps the
Bruce's father, who chooses practically and cynically to support the nobles.
He is finished; no one will follow him as his betrayal becomes too painfully
Will it be the banal fascist with the easy answers, the vile leftist with
retribution to offer, or a 'braveheart' who has nothing to offer but
hardship, and freedom?
America is not alone in this. The UK is further along the path. We may see
the first expression of the future of the West in London than in Washington.
Only the future will tell.
"There's class warfare, all right, but it's my class, the
rich class, that's making war, and we're winning." Warren Buffett New
York Times, November 26, 2006.
"The class warfare is over -- we lost. I want to make that
announcement today. Working people lost. The middle class lost." Dennis
Kucinich, 18 December 2009
And in the short term there will be quite a bit of jostling at
the middle of the ladder, by those who fancy themselves, or their children,
suited for the new nobility and so seek to perpetuate the status quo, with a
lot of kicking and dog eat dog going on at the lower levels as the ladder
shortens, trying to knock the immigrant, the less connected, off into the
abyss, to feed the beast.
Out of all of this will come something different, and most likely something
unexpected. Its an old story, one that replays over and over. The remedy is
sound reason and the Constitution, but these forces have been in retreat for
the past ten years at least. Reform and justice have few friends while the looting
of a generation is in progress.
"For what we’ve learned in the last few years as one
scandal after another spilled onto the front pages is that the bubble
economies of the last two decades were not merely monstrous Ponzi schemes
that destroyed trillions in wealth while making a small handful of people
rich. They were also a profound expression of the fundamentally criminal
nature of our political system, in which state power/largess and the private
pursuit of (mostly short-term) profit were brilliantly fused in a kind of
ongoing theft scheme that sought to instant-cannibalize all the wealth
America had stored up during its postwar glory, in the process keeping
politicians in office and bankers in beach homes while continually moving the
increasingly inevitable disaster to the future.
That is a terrible story and it is also sort of a taboo story, since we
don’t really have a system of media now that is willing or even able to
digest that dark and complicated truth. Instead, our media — which has
always been at best an inadvertent accomplice to these messes — is
basically set up to take every revelation about the underlying truth and
split it down the middle, feeding half to one side of the political spectrum
and one half to the other, where the actual point is then burned up in the
useless smoke of a blame game.
The essentially complicit nature of the two ruling political parties was in
this way covered up for decades, as the crimes of the Democrats were
greedily consumed as entertainment by the Limbaugh crowd while the crimes of
the Bushies became hot-selling t-shirts and bumper stickers for the Air
America listenership. The abiding mutual hatred the red/blue groups shared
consistently prevented any kind of collective realization about the structure
of the overall scheme...
Everyone had a hand in the bubble, from the congressmen who killed
regulatory initiatives to the regulators who snoozed at the wheel to the GSEs
to the Fed to the banks to the ratings agencies to the lenders. I
don’t think it’s really controversial to say that, but it does
seem like there’s an argument brewing about what that across-the-board
My own personal feeling is that our recent bubbles weren’t much
different than pyramid scams and lotteries; they’re the handiwork of
an essentially regressive and deeply cynical political organization that
systematically hoovers up taxes and investment money mainly from middle-class
suckers, where it eventually gets eaten in short-term cashouts and mostly
blown on sports cars and tropical vacations and eye jobs for the trophy wives
of Wall Street executives. Crackonomics:
take literally all the spare money from four square city blocks and turn it
into one tricked-out Escalade.
For me the basic dynamic of the mortgage bubble is some Ivy League dickwad
hawking a billion dollars of securitized subprime mortgages to a pension
fund, and then Hobie-sailing off into the sunset with a bonus after they all
blow up. Of course my seeing it that way might have a lot to do with my own
personal psychological prejudices, and I get that some other person with
different hangups might choose to focus on Barney Frank deciding to
“roll the dice on home ownership” with the GSEs...
This GSE story is a big one, but if it gets used as a path back to a “The
Market Reacted Rationally” version of history, we’re screwed. It
has to be looked at as an important part of a diabolical whole, a symbiotic
scheme in which the banks and the state were irreversibly intertwined in an
enterprise that on both sides was never about market economics, but crime.
Because otherwise… the diversionary notion that one side or the
other is wholly to blame is part of what makes the whole scam possible..."
Why would you care? Why be concerned about the other? Because when the time comes,
there may be no place to hide. Madness makes few rational distinctions
between what is and is not worth preserving. Time to listen to the survivors,
and not imagine that this time it will be different.
"First they came for the intellectuals, and I did not speak
out—because I was not a intellectual;
Then they came for the communists, and I did not speak out-because i was not
Then they came for the trade unionists, and I did not speak out—because
I was not a working man;
Then they came for the disabled, and I did not speak out—because I was
Then they came for the gypsies, and I did not speak out—because I was
not a gypsy;
Then they came for the Catholics, and I did not speak out—because I was
Then they came for the Jews, and I did not speak out—because I was not
Then they came for me —
and there was no one left to speak out for me."
Please visit Jesse’s Café Américain
for refreshing news on the markets