Tuesday, September 28, 2010

American De-Evolution: Tribalism, Extremism & The New Normal...

“We live on a placid island of ignorance in the midst of black seas of infinity, and it was not meant that we should voyage far.” - H.P Lovecraft.

The “animal spirits” of which Keynes spoke are on the prowl across the United States. Their mood is ugly. The spirits are wary and troubled. Corporations and individuals are hoarding cash, when they have any, because they’re not buying into the recovery.

On a weeklong visit, I found a mood of deep unease in an America that seems to have descended into tribalism — not ethnic, but political, economic and social. Uncertainty is pervasive. The government’s rescue of Wall Street combined with the acute difficulties of a middle class struggling to get by on stagnant or falling incomes has sharpened resentments.

This is not a momentary phenomenon. Nobody seems to think unemployment is going to fall significantly from 9.6 percent — a level more often associated with France — in the near future. Get used to the new normal.

I spoke to a retired Wall Street executive who got out a few years back and set up a small business where he had to make payroll (sobering), but was freed from the debilitating short-termism of financial institutions that, over his career, had become dominated by traders “who look at economic opportunity rather than economic conditions.” He said the final straw came in 2002. Top executives at the bank where he worked gathered to discuss their bonuses. The issue before them was whether to maintain those bonuses in a time of economic contraction, which would require firing 5 percent of the workforce, or take a 25 percent bonus cut, which would allow those jobs to be kept. “The guy running the meeting asked for a show of hands on who would accept a reduced bonus,” he said. “There were 30 of us in the room. Three raised their hands. I was one of them.”

The job losses went through, this executive left, and the bank today is still trying to claw out from its uncontrolled excess.

America is a land of associations. Solidarity has not vanished from the land. But it’s in retreat. None of those guys who wanted all their yummy money was anything but rich. Fragmentation holds sway. The stock market used to be a fair proxy for the state of the economy. Now it’s a market of traders, not investors. They want to know what the spread is today and tomorrow; they can make money on the way up or down; they care far less about U.S.A. Inc.

So the market goes where it goes — up of late but largely directionless (which makes it harder on those up-or-down traders) — while out on Main Street the struggle to make family payroll continues. People work longer hours, they juggle how to cover their kids’ needs, how to de-leverage just a little — and they’re still meant to “consume” for the economy’s sake.

The share of national income held by the top 1 percent of American families has doubled in recent decades to 20 percent. That’s a huge shift. I spoke to Doug Severance, a Vietnam vet who’s a hotel employee in Aspen, Colorado. “When I moved here in 1984 we were all family,” he said. “Now either you arrive in a Lear Jet or you’re a servant.”

Obama hope has dissipated in short order. He’s not entirely to blame and he’s not blameless. The exclamation from Velma Hart, a black Obama supporter, at a recent town hall meeting — “I’m exhausted of defending you,” — struck a national chord because so many people feel the same thing.

The policy debate in the United States is head-spinning. Nobody knows if there’s going to be more fiscal stimulus, after the first $787 billion, or how a row over taxes will end. Under an Obama proposal, Bush-era tax cuts are due to expire at year-end for affluent couples and small business owners earning over $250,000. Republicans are digging in, saying it’s crazy to raise taxes in a faltering economy.

It’s not crazy. Ending the tax cuts for the rich is a minimum signal for a divided land, a statement that the two Americas are acquainted with each other. But with Obama facing a stinging midterm defeat, it looks like a long shot. What is needed above all is some clarity and sense of direction — the kind Cameron has given in London and booming China consistently applies.

Without that expect the animal spirits to keep on hoarding, an inward-looking America bent on retrenchment, and a new normal that lasts and lasts...

VIOLETPLANET SAYS: ...and nothing lasts forever. Extremism is on the rise from religion to politics. The public education system ? A travesty of epic proportions. The news media is no longer news but a cross between "infotainment" and blatant propaganda which the majority buy into without question and... finally, according to the Supreme Court, corporations are people now. The end ? At this rate, it will not be a happy one. Soon...time to fly.


-Roger Cohen, (Excerpt: “The New American Normal,” New York Times, 9.27.10. Image: -Oakland_Kate, "Hominids Out For A Stroll," 2010 ).

Saturday, September 18, 2010

Stick To The Devil, To The Gods Of The Market Place, The Fire Would Certainly Burn....

As I pass through my incarnations in every age and race, I make my proper prostrations to the Gods of the Market Place.

Peering through reverent fingers I watch them flourish and fall, And the Gods of the Copybook Headings, I notice, outlast them all. We were living in trees when they met us. They showed us each in turn

That Water would certainly wet us, as Fire would certainly burn: But we found them lacking in Uplift, Vision and Breadth of Mind, So we left them to teach the Gorillas while we followed the March of Mankind.

We moved as the Spirit listed. They never altered their pace,

Being neither cloud nor wind-borne like the Gods of the Market Place,
But they always caught up with our progress, and presently word would come
That a tribe had been wiped off its icefield, or the lights had gone out in Rome.

With the Hopes that our World is built on they were utterly out of touch,
They denied that the Moon was Stilton; they denied she was even Dutch;
They denied that Wishes were Horses; they denied that a Pig had Wings;
So we worshiped the Gods of the Market Who promised these beautiful things.

When the Cambrian measures were forming, They promised perpetual peace.
They swore, if we gave them our weapons, that the wars of the tribes would cease.
But when we disarmed They sold us and delivered us bound to our foe,
And the Gods of the Copybook Headings said: "Stick to the Devil you know."

On the first Feminian Sandstones we were promised the Fuller Life
(Which started by loving our neighbor and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said: "The Wages of Sin is Death."

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.

As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wobbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return.

-Rudyard Kipling (“Gods of the Copybook Headings”, 1919. Kipling: 1865-1936: Best known for his works of children's fiction: "The Jungle Book" (1894) Also, many short stories, including "The Man Who Would Be King" (1888). Image: -George Yoshitake: capturing an atomic explosion at a test site in the Nevada desert in 1957. Much of these photographers work has been declassified since 1997).