How Bad? Worse Than Bad.

( – promoted by buhdydharma )

The ongoing and rapid collapse of the US and Global economy, far from being an abstract series of events, is being brought home forcefully and concretely to millions of people on a personal level with the loss of their jobs and consequent drastic reduction in their ability to not only purchase things they want for themselves and their families but even to purchase the basic necessities of life and obtain things they need.

A cycle pushing us into a self reinforcing deflationary spiral in which less and less people are able to support the dwindling economy with their purchases which causes even more job loss and less economic activity, and so on, as we saw highlighted in very sharp focus in How Bad? This Bad with the graph from Swampland compiled using Bureau of Labor Statistics numbers that:

…compares the job loss so far in this recession to job losses in the 1990-1991 recession and the 2001 recession — showing how dramatic and unprecedented the job loss over the last 13 months has been.  Over the last 13 months, our economy has lost a total of 3.6 million jobs – and continuing job losses in the next few months are predicted.

By comparison, we lost a total of 1.6 million jobs in the 1990-1991 recession, before the economy began turning around and jobs began increasing; and we lost a total of 2.7 million jobs in the 2001 recession, before the economy began turning around and jobs began increasing.

The response from the government so far, from the Bush administration and the Congress, and continuing through into the new Obama administration, has been attempts at bailouts of the very wealthy in the financial sector, through shoveling money at manufacturers such as the auto industry so they can continue producing products in the face of crippling reductions in sales revenues, effectively “stealing” money from their prospective customers who were already more and more unable to buy their products, to finally with the current administration to an ostensible “stimulus” bill supposedly aimed at “creating” jobs.

All of which has been and is being done by saddling taxpayers, the very people these attempts have been ostensibly aimed at “helping” with long-debunked “trickle down” economics, with enormous and growing crushing future debt and thus crippling their future as well as present ability to purchase products and services, and crippling future prospects for an economic recovery.  

For it is taxpayers that will eventually pay the bills one way or another, as any such job creation stimulus spending can only, in the last analysis, come out out the pockets of the people for whom jobs might be created with a “stimulus” that is effectively loaning their own future income to people who will be unable to pay the debt created by the “loan”, as the housing bubble and subprime mortgage debacle effectively did.

In October 2007 here at Docudharma Magnifico wrote in America’s Optimism Is Gone that…

…most of us in American aren’t willing to begin a national self-examination or introspection into why the United States is in such a predicament. “For the central problem is not that they were lied to – though that of course is a problem – but that they have constantly found some of these lies more palatable than the truth,” he writes. That is what America has become in a nutshell. Most Americans would rather live and believe in the lie, than face reality.

…the 2008 presidential candidates are not discussing America’s malaise and not publically doing any sort of root cause analysis. Instead, our politicians keep telling us how wonderful and great America really is.

Americans won’t be able to fix the problems the country has until Americans are willing to admit there is a problem here. It may be cliché, but that, I think, is the State of the Union.

I don’t have much to add other than I feel trapped here in the U.S. I expect things in America are going to get a lot worse before they can start to get better. If Americans want to believe lies rather than face truth, then America will slide into an authoritarian or fascist state in the very near future.

So while a “stimulus” of some type is undeniably needed, what is the longer term effect of one that only is aimed at continuing the same problems that got us here in the first place? If all it will do is recycle money from future to present it will not help the future prospects for the economy and for people.

One question that is rarely if ever asked is: What is it, exactly, that needs to be “stimulated”?

It’s been said many times in many ways that the very definition of insanity is doing the same things repeatedly with the delusion that a different result will at some point obtain.

New money, new wealth, as always, will have to be injected from outside the loop, if the economy is to be “grown” to handle the added debt created with the kind of stimulus thinking the government seems to be trapped in.

And where can such “new wealth” come from? Are we moving inexorably now towards more of the same insanity that got us where we are?

Confidence, like truth, is often one of the casualties of war.  The problem arises because everything that has been “doing” has brought us to where we are… and we have a hard time internalizing the concept of “not doing” as being an effective course of action that produces results, sometimes faster than anything else.

Most reading this may by now be wondering what the hell I’m talking about here. It’s not so much that we have to do something as it is that we have to stop, collectively in our consensual reality that creates our world, doing something that we are already doing.

Here’s a more concrete discussion from a few months before the 2004 presidential election.

American Exceptionalism, A Disease of Conceit,

by Ron Jacobs at CounterPunch, July 21, 2004

Any person who is honestly opposed to the US presence in Iraq and Afghanistan has got to wonder why the movement that developed against the US war on Iraq before the March 2003 invasion has faltered so badly and now seems to be caught up in the movement to electorally defeat George Bush, even though that means supporting John Kerry-a politician who not only supported the invasion and occupation, but talks openly about widening the war to include the NATO countries and tens of thousands more US troops. One could place the blame on the failure of the movement’s politics, always more liberal than anti-imperialist. Or, one could place the blame on the leadership. In both cases, one would find some basis for their argument.

When it comes to the bottom line, though, the underlying cause for the US antiwar movement’s current stasis is that most of its adherents believe in one of this country’s basic tenets-a tenet that is ultimately religious in nature. For lack of a more descriptive phrase, we’ll call this phenomenon American exceptionalism.

America is not a better country than any other. Its citizens and residents are as venal and as great as any others in any other part of the world. The only thing that sets us apart is our wealth. The only reason we have that wealth is because we stole it. God didn’t give it to us, nor did any greater American intelligence or know-how. Robbery is what our foreign policy is based on, just like our racial policies. It’s not the policies that need to change, but the foundation upon which those policies flourish. Until US activists accept this and give up their conscious and unconscious acceptance of the myth of American exceptionalism, any movement against war, racism, and other ills of our world is bound to fail. Not because it doesn’t have the right motivation, but because it doesn’t have a radical enough conception of itself and the world it exists in.

The anti-war movement faltered out of it’s own self-interest, when too many people decided that it was more important to spend their energy helping their chosen party gain power. In the belief that they couldn’t be effective without first acquiring power they stopped expending their efforts opposing war.

War? What war? How do we get from economic collapse to war? Haven’t we had enough of war the past eight years? What possible good would more war do? Didn’t war go a long ways toward getting us where we are now?

Let’s hear an economist here. A political economist warning that we are well on our way towards trying one more time to buy our way out of economic collapse with military might, more imperialism, and outright theft, only this time bigger and better than ever before.

F. William Engdahl is an economist and author and the writer of the best selling book “A Century of War: Anglo-American Oil Politics and the New World Order.” Mr Engdhahl has written on issues of energy, politics and economics for more than 30 years, beginning with the first oil shock in the early 1970s. Mr. Engdahl contributes regularly to a number of publications including Asia Times Online, Asia, Inc, Japan’s Nihon Keizai Shimbun, Foresight magazine; Freitag and ZeitFragen newspapers in Germany and Switzerland respectively. He is based in Germany.

Engdahl has done a
series of three interviews in the past three days with Paul Jay of The Real News.

In the third of the series, below, Engdahl concludes with:

As the U.S. financial dominance in the world comes to an end […] “certain powerful actors will turn to the U.S. military power projection around the world,” and that, “this is the real danger of a World War III.”

Real news: February 8, 2009

Two years recession, or ten years of hell?


Engdahl: The danger is the US may turn to military might as their financial power weakens


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    • Edger on February 8, 2009 at 19:36

    • Edger on February 8, 2009 at 20:36


    • LoE on February 8, 2009 at 22:35

    … in the same vein as the one you put above the fold:

    Dorothea Lange, one of the FSA photographers.  Your tax dollars at work.  Well, your grandparents’ tax dollars at work, actually.  And this was several years into it.

    • RUKind on February 9, 2009 at 01:29

    It’s in knowing when and why.

    We’re living on the edge of simultaneous, multiple event horizons. An event horizon is a point beyond which everything is unknown. The classic case is the black hole. At some point all mass and energy collapses inward and nothing measurable on the other side of that tipping point is available to us.

    We’re at that tipping point economically and environmentally and if either of those collapses then socially as well.

    Tend your gardens well.

  1. Although extremely depressing, just as OPOL’s diary is!  

    You ask, “What is it, exactly, that needs to be “stimulated”?

    I think there is a major problem here.  I think the “spirit” of the average American, at this point, is somewhat broken — Americans, whether they speak of it or not are disheartened by the so-called “American dream,” or, maybe, they’ve even forsaken that idea, and are simply depressed by going on and on like the “drones” of society, with less and less benefits to them, and less and less ability to sustain themselves period and, as a result of a genuine fatigue have become and are so tired that they find themselves lacking in the ability to not only face the truth, but to even give a damn beyond getting themselves a meal after a hard day’s work and attempting to get some rest so that they can continue to repeat the same thing the next day.  For most Americans, there is little quality of life, because they ARE TIRED!  Because they are have been usurped of just about all the “gusto” within them.

    Eugene Jarecki, an author, playwright, etc., spoke on this very issue the other day on NPR — I’m trying to locate the segment so that everyone can listen to his compassion and what, he feels, needs to be done.

    But, IMHO, what needs to be stimulated is not only the American people, but the people that WE PAY IN OUR GOVERNMENT to ACT ON OUR BEHALF and BEAR SOME CONSCIENCENESS THEREFORE.  

    M F ‘ S !

    • Edger on February 9, 2009 at 05:44

    4 bank failures were announced by FDIC on Friday alone…

    Reuters via truthout

    Friday 06 February 2009

       Washington – Regulators closed banks on Friday in Georgia and California, bringing the total of U.S. bank failures to nine this year.

       The Federal Deposit Insurance Corp said County Bank of Merced, California, was closed by the California Department of Financial Institutions, and the FDIC was appointed as a receiver.

       County Bank, which operated 39 offices, had $1.7 billion in assets and $1.3 billion in deposits, according to regulators. Westamerica Bank of San Rafael, California, will assume all of the deposits of the failed bank.

       The FDIC said in a release the cost to the Deposit Insurance Fund would be $135 million.

       The FDIC also said it became a receiver of Culver City, California-based Alliance Bank and entered into an agreement with California Bank & Trust, a subsidiary of Zions Bancorp, to assume all the deposits.

       Alliance Bank was closed by the California Department of Financial Institutions. The bank had $1.14 billion in assets and $951 million in deposits. The cost to the Deposit Insurance Fund will be $206 million, the FDIC estimated.

       Regulators said on Friday a third firm, FirstBank Financial Services, had failed.

       All deposits of the McDonough, Georgia, bank will be assumed by Regions Bank of Birmingham, Alabama, said the FDIC, which took receivership of FirstBank.

       Regulators said FirstBank Financial Services had assets of about $337 million and $279 million in deposits at the end of 2008. The estimated cost to the Deposit Insurance Fund will be $111 million.

       In 2008, 25 banks were seized by officials, up from only three in 2007.


       (Reporting by John Poirier and Christopher Doering; editing by Peter Cooney.)

  2. it is a long way off yet I fear…….

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