On Friday, the stock market (Wall Street and the rest of the world) was reeling after oil prices tanked to less than 50% of what they were in 2010. This after news that China’s stock market was kept afloat only after the central government rescued it. There’s lots of room left for markets to fall. I keep telling you–I am the simple Artist. I sing, I dance, I recite the silly monologue. Still, I feel like I called the current market melt-down correctly back in January. I was just pushing out what others wrote, of course. But the narrative I was following was different from the bromides being put forward by the pundits and political opportunists. This one, for example:
Those who followed this blog know that the above meme is full of bull-puckery–the info on unemployment has been hopelessly cooked. And a country where some 93 million adults are not fully participating in the workforce (a record) is not a country recovered from the worst recession since the 1930’s. A little over a month ago, I quoted James Rickards, a writer whose books lay out the case for the end of the petro-dollar and coming currency wars. The quote that matters: “The problem with the post-2007 world is that we are not in a cyclical recovery; we are in a structural depression defined as a sustained period of below-trend growth with no end in sight. The U.S. has caught the Japanese disease. Structural depressions are not amenable to monetary solutions, they require structural solutions.”
And because we’re in a structural depression, conventional ammunition to craft a ‘recovery’ isn’t in place. The Fed has already lowered interest rates to zero. There’s no money to bail anybody out–and DC won’t pull another TARP to save the banks (QE II isn’t working anyway, except as a nice bonus for the banksters). This would be a perfect time to devote a couple trillion to fix infrastructure, but the majority of congresscreatures are against spending money on anything except planning for war and cutting taxes and are talking about another government shutdown. It leads me to the assumption that the Tea Party is flirting with default again. And even if national governments tried to stanch the bleeding from a stock market meltdown, they can’t do anything about the completely unregulated $1.2 QUADRILLION derivatives market–big enough to sink the world economy many times over. A big loss for derivatives markets could be a thousand times more than AIG’s losses in 2008.
Which brings me in a roundabout way to my post of a few days ago regarding Hillary. American history on this point is clear–when there’s a major economic meltdown, voters hold the party in charge responsible. The coming recession/depression isn’t technically Obama’s fault–the above-mentioned congresscreatures are believers in the ‘austerity’ solution to economic downturns–but it won’t matter once the unemployment rate goes up and states start running out of money. There’s no way Hillary doesn’t get linked to the disaster in the public’s mind. She is an ‘insider’ by every definition. And I don’t see a meltdown helping the Republican case, either. Donald Trump is on record bragging about his Wall Street acumen, and the rest of the Republican clown car is busy talking about free markets. Jeb Bush won’t be welcome if all he does is remind people of how his brother did when the economy melted down in 2008 . The only political beneficiary of a market meltdown would be a candidate who’s not technically part of either party, who’s been campaigning against the oligarchs for decades, who… well, you know. this guy.
But that’s assuming things come out peacefully. One of the things I wrote about in the heyday of Occupy Wall Street is that I understood why young people were at Zuccotti. What I didn’t get is why their parents weren’t there, too. A stock market meltdown puts the Baby Boomer generation completely behind the eight-ball. My boomer friends are getting thrown under the bus left and right, and this is before the full damage from the current stock meltdown is factored in. They’ll get out their marching boots as long as there are port-a-potty’s every couple hundred feet for those of us with old prostates. Or we’ll be like the ‘Who’s Next’ Album cover.
Interesting times ahead…
For my nthe friends, I’m aware that the current economic mess is part of a larger pattern of unraveling that we all know is inevitable. Remember this helpful meme:
Don’t forget the wage crisis. Wages have been stagnant for decades. The federal minimum wage is $7.25 an hour,though it’s higher in some states and cities. It needs to be raised to at least $15 an hour,and then go up every year. It hasn’t been raised in years,and it will create jobs and boost the economy.
I don’t disagree, but a $15 per hour boost won’t rescue the economy at this point. There isn’t enough demand to bring back oil or fill the empty cargo ships that were the tipoff to the economy imploding.