The meanderings and musings of a wandering philosopher, writer, counseling therapist, and speculator.
Saturday, February 18, 2012
I have been revising my opinions on the economy of late ...
I no longer agree with the deflationists that we will be just like
Japan. That is to say in a condition of continued deflation which would
be the result of keeping alive bankrupt (zombie) banks and corporations
(though indeed there are already any number of zombie banks and
corporations, to be sure, but our situation is different in kind from
that of Japan in that the United States is capable of imperial action
and foreign adventure and the Japaneses currently are not).
also part with those predicting hyperinflation because I don’t believe
Open Market Operations will have the inflationary impact they believe
will occur. I say this because bank lending, the best tool for inflating
money supply, will remain constrained and be a drag on the economy.
This means I believe when the economy has gone into a double-dip decline
between now and 2016 (or thereabouts, I have no crystal ball) the Fed
will create ways to inflate using Open Market Operations that will be
effective while government and business collude to create wars and an
eventual green technologies bubble that should measure 27 trillion
dollars when it goes bust. This is to say there are many tools at hand
to keep the day of reckoning or any true democratic solution at bay.
This means hardship and increasing third world conditions in the United
States for for everyone but the top 20% of our society and a kind of
serfdom or corporate indenture existence for any individual within the
top 20% who cannot integrate themselves into a global economy through a
direct relationship with the financial markets.
Even I am
amazed at how the ideas of Keynes and von Hayek are being so deftly used
in concert to social engineer events so that majority will vote against
their own interests within the domestic two party system. Unless you
have 5 million dollars in liquidity your short and long term interests
as citizen are not included on the bargaining table except as
disposable collateral marketing pieces of a rhetorical nature meant to
garner your vote and ratification for your current increasing
marginalization and economic (and therefore political) demise.
There will be protest like in Wisconsin and the Occupy Movement, and
there may be sporadic incidence of riots, but nothing that will not or
cannot be contained. I see no mass action on the part of labor which
will be content to be the ATM machine of the democratic party hoping to
live off the scraps of access. There is still too much wealth to be
squandered and only people who who can't feed themselves revolt. Access
to bread and circuses even for the most squalid will continued to be
provided in one form or another.
The noise you think is a
bang is actually a whimper. Still if you are a humanist, if ever there
was a time to live for future memory, now is that time in accordance
with your highest ideals with courage to confront coupled with realistic
acceptance of your basest impulses and drives. In a sentence … work on
your soul and find a way to serve others.