Seems like our perpetually dismal prognosticators (like Uber-Gloom-and-Doomer Bonddad) may get their wish -- or if not a wish, an expectation -- fulfilled. The United States economy may well be headed to a hard landing indeed, perhaps the hardest since 1929-32.
The signs, of course, have long been with us: unsustainable personal and corporate debt, combined with corruption levels not seen since the age of the Robber Barons, combined with war and defense spending that far outstrips anything known during the Cold War, every bit of it financed with borrowed money, borrowed from our friends in China for the most part, paid for with bonds, which now, with the collapse of the dollar on world markets, may be getting close to worthless. Needless to say, our Chinese friends may want some satisfaction.
You know just how serious this economic situation may be when the President Himself is moved to act -- by demanding that Congress pass a Stimulus Package Forthwith, consisting of more tax cuts for corporations and the wealthy, and some sort of check or something to the Masses to keep them from revolting outright. You know it is serious when the Presidential Stimulus Package Directive is double that of Democratic Presidential Candidate Barack Obama, and almost double that of Populist Presidential Candidate John Edwards. You know it is serious when even Avowed Socialist Candidate Hillary Clinton's Stimulus Package pales in comparison to the Presidential One.
You know it is serious when oil prices have fallen (at least temporarily), and surprisingly and highly uncharacteristically,gasoline prices have fallen somewhat as well. Yes, yes, the claim is made that January gas prices are "always the lowest," though given the way the petroleum markets are manipulated, that's quite an absurd observation. Time of year has been almost completely divorced from consumer petroleum price.
It's serious when banks figure out it is more in their interests to work with mortgage customers than to keep pulling the rug from under them and forcing them into foreclosure.
It's serious when Civil Society in this country begins the process of turning on the predators and looters and plunderers who insist that they have a right to profit no matter what, while the value of Civil Society's holdings plummets.
A 30% drop in real estate sales and values around here (mirrored in many other parts of the country) is starting to cause some sleepless nights among the remnants of the American Bourgeoisie. The report I saw yesterday said that real estate values in California are now about where they were in 2005, before the Boom took off. Those who didn't buy at the inflated prices after 2005 are still sitting relatively pretty, but millions upon millions did buy -- and they were not necessarily fools to do so -- and are now sitting on swiftly depreciating assets.
Unemployment is rising and is expected to keep rising at least through the first quarter of 2008; how convenient for electoral politics. But high unemployment means the economic slump is sent into a worsening spiral. Few people working means less consumer spending, which fuels more unemployment, and so on.
The only bright side right now is that interest rates are not expected to rise. At least not in the short term. They may fall to rates not seen for some time. But the effects of Federal Reserve rate cuts under Bernanke seems to be the opposite of the Greenspan years.
In other words, there may be deeper flaws in the economy than the Usual Actions can remedy.
All of which has long been predicted, but the upshot of the Coming Crash is still a Mystery.
Sara Robinson over at Orcinus has been blogging on the impending 2008 catastrophe since the beginning of the year. She's said quite a bit about it, and the following struck me as key:
The upshot of all this is that we're at a point where it's all up for grabs. When the center fails to hold, the right to define the new reality belongs to whoever can move in their first with a big, compelling idea, and get people to start organizing around it. It's a moment of creative chaos that's bursting with new energy and tremendous potential -- for those who are ready to jump in there and lead.
These have always been the moments when progressives throughout history were able to make their biggest gains -- to seize entire nations, and drag them off in radically new directions. The future belongs to the group that gets there first, with the best plan and the biggest vision. If we miss this one, none of us are likely to live to see another chance like it again.
But, as usual, opportunity comes with the potential for crisis. The churn of change also leads to vast economic and political dislocations that provide perfect conditions for authoritarian movements, too. Alongside all the other problems bearing down on us, that's a very real risk that we need to keep at the front of our minds. If we don't step up and fill that yawning hole with something that brings out the best in people, inspiring them toward hope and progress -- well, then, you can bet that somebody else, selling a very different future, will get there first with something that will bring out the worst, and drive them toward madness and death. Either way, our grandchildren will be living with the consequences a century hence. It's not a moment we can afford to screw up.
As some people have pointed out, the economic mess we're headed into has been predicted for years, and actions to stave off the worst of it have been proposed from the sidelines for as long, but nothing substantive has been done. Awaiting the Presidential Command?
Or is it something else? Some hesitation about getting ahead of any curve, of being out of step with the mainstream, or of not being heard?
Now that government and candidate proposals are out there, they all seem to be too little, way too late, and, unfortunately tilted to saving the rotting asses of corporations and the upper classes while throwing what amount to scraps to the Masses. All dedicated to preserving the Palace Culture and the status quo, even though all of it may be swept away in a tide of Change like we've never seen before.
It's not so much that our Rulers are clueless (which, unfortunately, they are and they demonstrate every day), it is more that they are Rulers, and most of them have no business being in that position.
A Change is [Surely] Gonna Come.
But who will lead it? Or will it come, finally, from The People themselves?
"A Change Gon' Come" is Barack Obama's theme song, and on him has been put the dreams and aspirations of millions of Americans. He speaks such a positive and hopeful message, yet his proposals have a distinctly right wing cast to them, and in that, I see echoes of John F Kennedy and Franklin Roosevelt, both of whom ran to the right of their Republican rivals on many issues, won the Presidency, and governed more from the left, especially so in the case of Roosevelt.
Are we about to see it again?