Saturday, September 15, 2007

Happy Days Are Here Again

Fallout from the collapse of that wonderful "subprime" credit continues, as the US Dollar declines and we see more bank runs (such as what happened with UK's Northern Rock late this week). Of course predicting events like recessions and depressions would be well beyond my forte, I can't help but wonder just how much longer the house of cards can be propped up. The current credit crunch woes seem as I read it to bear some similarity to the aftermath of the Roaring '20s of the last century which led to social, political, and economic turmoil that lasted about a decade and included an effort by a sector of the elite class to hatch a failed coup attempt against a sitting US president (with a Germany or Italy inspired fascist state to replace the republic).

Of course there will be differences. The US was still a resource-rich nation, with access to an abundant supply of cheap hydrocarbon energy (e.g., oil), had the infrastructure for reviving its manufacturing base, and could still export far more than it imported. This time around, the elements needed to emerge relatively rapidly (and by that I mean a decade) from a depression will be missing. I suspect that there are a number of us who won't mourn the demise of consumer culture as it is unsustainable from an environmental point of view. What will concern us is the mass displacement of people as access to homes, jobs, etc., is lost. Those hoping that simply putting the nation into ever more warfare as a means to prime the economic pump are going to be proven deluded as there is no capacity to retool a moribund manufacturing sector for such purpose (I'd be against it on a matter of general principle to begin with), nor the coin needed to finance it in the first place. Where would our government borrow from? The US is already a terrible credit risk. Never mind that finding a willing pool of bullet stoppers (even among the newly unemployed) will be nearly impossible, nor would there be the means to pay them. It will also be much easier this time around to impose some form of fascist order, as the means for doing so have been largely put in place during the Bush and Clinton dynasties.

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