Thursday, August 21, 2008

a hard landing

Crow here. I just waved goodbye to my comely niece Aspidistra who's been visiting from her home in New York.

She told me about a man she overheard being interviewed for a magazine article that's more likely to be found on the bottom of a cage somewhere than read by many people. So I thought to give you a brief summary while susan mutters away in her corner drawing something or other.

One of the best quotes I've heard recently regarding the FDIC bailout of the Indy Mac Bank and more portentously the potential bailout of Fannie Mae and Freddie Mac is this - 'Profits are privatized and losses are socialized'.

Nouriel Roubini is Professor of Economics at the Stern School of Business at NYU and is also known as Dr. Doom. His prognostication for the American economy is a decidedly gloomy one after a close study of upheavals in worldwide emerging economies throughout the 1990's led him to the conclusion that the US would be the next to fail.

"Throughout the 90's, one emerging economy after another was beset by crisis, beginning with Mexico’s in 1994. Panics swept Asia, including Thailand, Indonesia and Korea, in 1997 and 1998. The economies of Brazil and Russia imploded in 1998. Argentina’s followed in 2000. On the eve of the crises that befell them, he noticed, most had huge current-account deficits (meaning, basically, that they spent far more than they made), and they typically financed these deficits by borrowing from abroad in ways that exposed them to the national equivalent of bank runs. Most of these countries also had poorly regulated banking systems plagued by excessive borrowing and reckless lending. Corporate governance was often weak, with cronyism in abundance".

Does that remind you of anything? Over the long haul he's not quite so pessimistic but he does see the writing on the wall for the collapse of the hegemony of the American empire. Maybe that long hoped for time will come when the Pentagon has to hold a bake sale to finance a new weapons system.

I'm probably dreaming but it would be a fine thing for the animal kingdom (which has no borders) if the most heavily armed, most paranoid country the world has ever known just kept a military for border protection and UN mandated peace keeping missions.

(artwork by Rudi Herzlmeier)


Border Explorer said...

//...he does see the writing on the wall for the collapse of the hegemony of the American empire.//
Finally, some GOOD news today!
Thanks, Susan!

Seraphine said...

would you buy a cluster cake from the pentagon? heh. i wonder whether it'll cost me an arm or a leg.

Seraphine said...

p.s. susan, wear the identical black turtleneck that goes with your cigarette pants. you remember, the one you crow about all the time.

lindsaylobe said...

Refererence : just kept a military for border protection and UN mandated peace keeping missions

In your dreaming it does sounds reasonable when you put it like that, I even think that what was intended originally for United Nations members before it fell apart to become the weak institution it is to day.

By the way, as your probably aware, U.S. arrears to the UN currently total over $1.3 billion plus current dues.

Best wishes

Randal Graves said...

Oh, to have the pentagon reduced to exactly that, freeing up so many resources used at artificially perpetuating empire for something that, I don't know, doesn't exploit the hell out of the planet.

Only collapse can save us. Or if armies of crows poked all our eyes out.

DivaJood said...

Bake sale, car wash, whatever. We are more like Rome under Nero than anyone seems to notice.

susan said...

be - That's definitely the upside and something to keep in mind through the rest.

sera - They probably don't even know how to preset the oven without blowing themselves up.

Yeah, that's the one I hoped you'd advise :-)

lindsay - Yes, the main problems the UN has is simply the fact that the US hasn't kept up its obligations.

randal - If Crow had fingers he'd have them crossed. It's my guess this isn't going to be a smooth transition.

divajood - Then came Caligula - what a cheerful thought.

okjimm said...

//'Profits are privatized and losses are socialized'.//

gees, when I had a lotta profits, I was heavily taxed........

when I had a lot of losses....

I was bankrupt.

Sure doan work for folks like it does for corrporutions

Scarlet W. Blue said...

'Profits are privatized and losses are socialized'.

Ah, that's good stuff.

Ben said...

Wow, those zoologists who talk about corvids being the brainy birds aren't kidding. Of course I'll feel better about the Pentagon bake sale if Blackwater doesn't have a fiscal and legal blank check.

susan said...

okjimm - That's been my usual experience as well as it is for most people. Didn't you mean to say corruptorations?

scarlet - How can you not love a guy who calls it like it is?

ben - We saw Mike Judge's movie, Idiocracy a while back. It seemed like a reasonable result of things continuing as they are. Remember - the future is a no brainer.

The Cunning Runt said...

The Big Money has already left the building; us Little Folks will be left holding this empty bag.

I have mixed feelings about our imminent collapse; on the whole, we've gotten downright viral, yet there are plenty of us who want it to be different, who want to help each other, who want to stop the wars and the lies and the bullshit.

Thanks for these clear words, You.

susan said...

cr - Me too. It didn't have to be this way but I'm concerned too about how it will play out in the coming years. Then again, I've lived through a few recessions already (that I wasn't much aware of at the time) by doing as you say - taking care of business and telling the truth.

Anonymous said...

For most of us who write, words hold supreme importance. I've noticed a complete reluctance to really discuss this issue in the mainstream media.

Americans are going to be shocked when it all comes tumbling down.

susan said...

dcup - They simply refuse to conjecture about the collapse and the ramifications it will have for the people you and I know - instead, they pretend it's the problem of a few 'dead enders'.

Anonymous said...

Hello, Susan.
Thanks for the backstory on Roubini. I've been reading his stuff on and off for a couple of years, but I never knew much about him. Very cool.

As for financial collapse, I think it would be worth it in the long run if we could learn our lesson from it. The way things are stacked these days, there is a very real possibility that would be impossible.

susan said...

pt - He's a pretty interesting character that most economists have either preferred to ignore or repudiate. The tricky thing is that he has a history of being correct.

I titled the thing deliberately because essentially I agree with you. There are way too many belligerent lunkheads flooring the pedal while fighting for the steering wheel, even though the axle is almost sheered through.

Anonymous said...

Crow - sorry for my late arrival here. I know. I was going to declare blog amnesty, but what I simply need to do is honor the code and read. Ok, enough of the administrative crap... bake sales for the Pentagon? How about standing on a street corner in Beijing holding a tin can and begging for alms. I could just see Gen. Petraeus asking, "Brother..can you spare a yuan?"

Jim said...

Bravo Crow!

America is a welfare state for corporations, socialism for the rich. No matter how irresponsible the action of corporations, no matter how much they steal from the American people, there seems to be limitless taxpayer dollars to bail them out.

Me, I'll take my chances with the borderless animal kingdom.

"Where there's life there's hope."