Swingtime (James Howard Kunstler)

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James Howard Kunstler -- World News Trust

Jan. 25, 2010 -- A lot of things started shaking loose last week, and not just in Haiti. The Scott Brown senate seat victory in Massachussetts shook loose a Democratic "super-majority" that only had to be constructed because the U.S. Senate stupidly turned the filibuster into standard operating procedure where it once was a seldom-used procedural dodge employed strictly by villains seeking to paralyze the chamber. Thanks to the new system, the senate is now in a continual state of paralysis.

The election in Massachusetts prompted President Obama to understand that the voters were pissed off -- among other things -- about the special privileges of banks and bankers, after a year of force-feeding them taxpayer money like Strasbourg geese. So he outlined a bank discipline offensive that sounded an awful lot like the return of the Glass-Steagall Act -- which several of his top advisors (Summers, Rubin...) had a direct hand in repealing a decade ago -- only without proposing to reinstate Glass Steagall. Go figure. Note: for all the bluster, Mr. Obama did not mention activating the moribund Department of Justice, where Attorney General Eric Holder has been in a coma all year. Somebody ought to inform the president that he has an entire criminal investigation division there, and that a little brisk leadership could gin them up into action as they were following the Savings and Loan scandals of the 1980s (when Republicans were in power, by the way).

Now, one big question is how come the president waited until after the Massachusetts election debacle to man up with the banks? Did it only just come to him that they were looting the nation -- with government assistance? Pretty obviously nobody will believe that Mr. Obama is sincere about reigning in fraud-ridden Wall Street until he issues pink slips to the Goldman Sachs alumni who have been running him like a radio-controlled monster truck: Summers, Geithner, Rubin, et al. There was a hint of that last week, when the president made his statement with "the big guy," Paul Volker, standing right behind him. Fed Chief Ben Bernanke and Treasury Secretary Geithner have both claimed more than once that they are "not regulators." That must partly explain the absence of meaningful regulation all year. My guess is that Geithner is about to be tossed overboard like a feculent weiner, and that the president is praying for the senate to vote against Bernanke's reconfirmation this week.

The underlying reality is that the financial sector of the economy has got to shrink. It ballooned from about 5 percent of the U.S. economy to about 22 percent over the last two decades -- mainly as a way to compensate for our declining real productive activity as we off-shored and outsourced and disassembled U.S. industrial capacity. Capitalism only works when it operates in the service of productive activity. Trading mere paper certificates (or digital simulacra of them) in ever more "innovative" (i.e. abstract and incomprehensible) ways is not a substitute for making goods. These practices reached such a grotesque level of unreality that they eventually poisoned what remained of our economic prospects. Now that their operations have been revealed as perfidious, these institutions have to be sliced and diced and, in some cases, punished, perhaps with extinction. It will happen anyway. The only question is whether civilian leadership can guide the process within the rule of law. In the meantime, the derivatives rackets that made up so much of the fraud -- especially the trillions of dollars vested in credit default swaps contracts -- are ticking out there like bombs placed by madmen, and may bring down the entire global money system before an orderly downsizing of finance can occur.

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http://worldnewstrust.com/index.php?option=com_flexicontent&view=items&cid=134:commentary-wnt-reports&id=7494:swingtime-james-howard-kunstler

[Demeter]

1. Recommend it a 1000 times!

Telling it like it is.

Time for some fat cats to swing (by their necks)

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2. Thanks Demeter

Kunstler can be acerbic sometimes. And I have trouble with his take on the Middle East sometimes. But, I think the core of his message is sound -- that Peak Oil is one of the main factors playing out in our economic collapse, and there's no way we can return to the economy of the 1950s-1960s.

BTW, he wrote a column last fall that I didn't publish, because he suggested that Goldman better watch out because somebody might put a bomb in their lobby. I'm not comfortable advocating violence, or even flirting with the idea.

[Demeter]

4. Maybe that's why they are moving their headquarters

Somebody, a critic (Ratigan?) was offering maps to their offices for people who wanted to protest and for the Justice dept. to arrest them.

[Skittles]

3. off to the Greatest Page with ye