Palatable Ugliness

Admittedly, watching and reading about the slow-motion economic train wreck that has been unfolding since last year can be downright depressing.

However, there are a few commentators who know how to use their various talents -- a sense of humor, literary eloquence, a nose for what is important -- to transform the ongoing ugliness into something more palatable.

Among the best is Jim Kunstler, author of World Made by Hand and The Long Emergency, who serves up all sorts of interesting commentary at his website, kunstler.com.

In his latest weekly column, entitled "Legitimacy Dwindles," Kunstler casts a cynical eye on several recent developments.

Zounds! Public sentiment toward the accelerating economic fiasco has shifted, seemingly overnight, from a mood of nauseated amazement to one of panicked grievance as the United States moves closer to an apparent comprehensive collapse -- and so ill-timed, wouldn't you know it, to coincide with the annual rigors of Santa Claus. The tipping point seems to be the Bernie Madoff $50 billion Ponzi scandal, which represents the grossest failure of authority and hence legitimacy in finance to date in as much as Mr. Madoff was a former chairman of the NASDAQ, for godsake. It's like discovering that Ben Bernanke is running a meth lab inside the Federal Reserve. And out in the heartland, of course, there is the spectacle of Illinois governor Rod Blagojevich trying to desperately dodge a racketeering rap behind an implausible hairdo.

What seems to spook people now is the possibility that everybody in charge of everything is a fraud or a crook. Legitimacy has left the system. Not even the the legions of Obama are immune as his reliance on Wall Street capos Robert Rubin, Tim Geithner, and Larry Summers seem tainted by the same reckless thinking that brought on the fiasco. His pick last week for chief of the SEC, Mary Shapiro, is already being dissed as a shill for the Big Bank status quo. In a few days we'll discover what kind of bonuses are being ladled out by the remaining Wall Street banks with TARP money and a new chorus of howls will ring out.

This is very dangerous territory. In dollar terms, the numbers being applied to the various problems are so colossal -- trillions! -- that the death of our currency seems assured. And in defiance of congress's express intentions, none of the TARP "money" has been applied to its targeted purpose of buying up "toxic" (i.e. fraudulent) securities hidden in the vaults of banks, pension funds, and municipal portfolios.

George W, Bush's personal bailout of General Motors and Chrysler is designed solely to postpone their bankruptcy and mass job layoffs until after the holidays. Otherwise, the $17.4 billion will probably be used by the companies to underwrite the extensive legal work required for the moment they must declare bankruptcy -- when Mr. Obama is in the White House. Meanwhile, the President-elect has ramped up his job-creation target overnight from two to three million, and some observers are catching a whiff of Soviet-style economic engineering ("...we pretend to work and they pretend to pay us....").

The years since Jimmy Carter have produced an astoundingly flaccid public, sunk in various addictions and distractions, but this is about to change. The darkling mood of political protest and violent activism that saturated my own young adult years is scudding up again on the horizon. Mr. Obama's pick for attorney general, the mild-looking Eric Holder, may be the key figure in the early months of the new government. If he doesn't commence some aggressive investigations and prosecutions -- beginning with Henry Paulson for insider trading when he was in charge of Goldman Sachs and shorting his own company's mortgage-backed securities -- then the whole Obama enterprise could fall under suspicion of illegitimacy. The bums who ran the US banking sector into a ditch have to account for their turpitudes. They can't be allowed to hide under a TARP.

Unfortunately, the legal system, and probably the legislative system, will be so buried in procedural bullshit from the unwind of countless enterprises and institutions, and the sorting out of the remnants, that it remains to be seen whether this generation of people-in-charge can even embark on a fresh start of anything connected to real everyday life in America. All this is starting to alarm the tattered residue of the middle classes, and from here it's a very short path to them being really pissed off.

When legitimacy erodes, anything goes. Nothing is respected including rules and personalities. The center doesn't hold and the new vacuum there is a tumultuous place. The same crisis of authority and legitimacy is spreading from nation to nation now. Soon, China will contend with a discontented army of the unemployed. Greece has been in an uproar for two weeks. Belgium's government just collapsed. Trade barriers are going up. Exports are falling away. The world's energy markets are not immune to these disorders. I would expect problems with the currently seamless supply lines that bring America two-thirds of the oil we use. Even a mild disruption of oil supplies could attach an anvil to the ankle of an economy already falling off a cliff.

Right now, the overwhelming sentiment is to get this country back to where we were, say, ten years ago, when everything was humming nicely: Clinton nostalgia. We're definitely not gong back there, though. It's an idle wish. And any set of policies designed to lead in that direction will prove very disappointing. Our destination is a land of much smaller-scaled local economies. We could retain our federal ties if the federal government can scale back appropriately from the bloated, feckless enterprise it has become. Otherwise, it might only get in the way and make matters worse, and the public in one region or another of North America might reach a decision that they are better off without it. That would be what's called a revolution.

What seems to spook people now is the possibility that everybody in charge of everything is a fraud or a crook. Legitimacy has left the system. Not even the the legions of Obama are immune as his reliance on Wall Street capos Robert Rubin, Tim Geithner, and Larry Summers seem tainted by the same reckless thinking that brought on the fiasco. His pick last week for chief of the SEC, Mary Shapiro, is already being dissed as a shill for the Big Bank status quo. In a few days we'll discover what kind of bonuses are being ladled out by the remaining Wall Street banks with TARP money and a new chorus of howls will ring out.

This is very dangerous territory. In dollar terms, the numbers being applied to the various problems are so colossal -- trillions! -- that the death of our currency seems assured. And in defiance of congress's express intentions, none of the TARP "money" has been applied to its targeted purpose of buying up "toxic" (i.e. fraudulent) securities hidden in the vaults of banks, pension funds, and municipal portfolios.

George W, Bush's personal bailout of General Motors and Chrysler is designed solely to postpone their bankruptcy and mass job layoffs until after the holidays. Otherwise, the $17.4 billion will probably be used by the companies to underwrite the extensive legal work required for the moment they must declare bankruptcy -- when Mr. Obama is in the White House. Meanwhile, the President-elect has ramped up his job-creation target overnight from two to three million, and some observers are catching a whiff of Soviet-style economic engineering ("...we pretend to work and they pretend to pay us....").

The years since Jimmy Carter have produced an astoundingly flaccid public, sunk in various addictions and distractions, but this is about to change. The darkling mood of political protest and violent activism that saturated my own young adult years is scudding up again on the horizon. Mr. Obama's pick for attorney general, the mild-looking Eric Holder, may be the key figure in the early months of the new government. If he doesn't commence some aggressive investigations and prosecutions -- beginning with Henry Paulson for insider trading when he was in charge of Goldman Sachs and shorting his own company's mortgage-backed securities -- then the whole Obama enterprise could fall under suspicion of illegitimacy. The bums who ran the US banking sector into a ditch have to account for their turpitudes. They can't be allowed to hide under a TARP.

Unfortunately, the legal system, and probably the legislative system, will be so buried in procedural bullshit from the unwind of countless enterprises and institutions, and the sorting out of the remnants, that it remains to be seen whether this generation of people-in-charge can even embark on a fresh start of anything connected to real everyday life in America. All this is starting to alarm the tattered residue of the middle classes, and from here it's a very short path to them being really pissed off.

When legitimacy erodes, anything goes. Nothing is respected including rules and personalities. The center doesn't hold and the new vacuum there is a tumultuous place. The same crisis of authority and legitimacy is spreading from nation to nation now. Soon, China will contend with a discontented army of the unemployed. Greece has been in an uproar for two weeks. Belgium's government just collapsed. Trade barriers are going up. Exports are falling away. The world's energy markets are not immune to these disorders. I would expect problems with the currently seamless supply lines that bring America two-thirds of the oil we use. Even a mild disruption of oil supplies could attach an anvil to the ankle of an economy already falling off a cliff.

Right now, the overwhelming sentiment is to get this country back to where we were, say, ten years ago, when everything was humming nicely: Clinton nostalgia. We're definitely not gong back there, though. It's an idle wish. And any set of policies designed to lead in that direction will prove very disappointing. Our destination is a land of much smaller-scaled local economies. We could retain our federal ties if the federal government can scale back appropriately from the bloated, feckless enterprise it has become. Otherwise, it might only get in the way and make matters worse, and the public in one region or another of North America might reach a decision that they are better off without it. That would be what's called a revolution.

Comments

[Peter]

"literary eloquence" ??? You have got to be kidding me!

It pains me to read Kunstler's work. For goodness sake, make your point, move on. His musings are typically overpopulated with metaphors, similes, and tired cliches. One can occasionally find a lucid observation buried within his writing - I just don't care to dig through the fluff to find it.

[nevket240]

I called for Hanky-Panky to be indicted over 2 years ago. He has more fingers in pies than most humans have fingers. The Global Warming//alternative energy fraud is one of them. Now we are told that investors in the Madoff scandal may have to give back 6 years of returns. OK. Why aren't the last 6 years of bogus bonuses made under fraudulent business practices being claimed and the funds used instead of taxpayers $$$??
regards

[Independent Accountant]

I came across this article at Jesse's. I have said similar things for about a year. Peasants, ready your pitchforks!

[Susan]

Here is a guy who has been calling this for a couple of years and has a good site and DVD about this:

www.chrismartenson.com

We've seen this coming for a couple of years. In preparation we got rid of all our debt, moved to the old family farm, and more: but we are still scared s**tless watching it play out! We are now the most obese, illiterate, superstitious, violent and heavily armed industrial nation on the planet. We are not the same people who weathered Great Depression One -- and I think it could turn VERY VERY dark and ugly in this country.

I hope not. I have kids! But at the same time, we *ucking deserve it collectively!

[zarkov]

"It's like discovering that Ben Bernanke is running a meth lab inside the Federal Reserve."

If only he were! It would be a lot less dangerous for the republic because the Fed has entered uncharted territory. The base money supply has doubled in a few months. The Fed's reserve account has increased by a factor of 80. That's 80 fold, not 80%. What's more the Fed refuses to disclose what it has bought, and from who. Nothing like this has ever happened before. No one really knows how changes of this magnitude in so short a time will effect the financial system and the economy. Economic theory uses linearized models which are probably not valid for large changes. The problem with Bernake and other academic economists is they might believe their own bullshit. They are playing with fire and the whole house might burn down.

[barney]

Clinton nostalgia? He caused this mess; the double digit equity gains weren't sustainable and people were living on crack since, behind their backs, Clinton and Gore did NAFTA so, down the road, that's like punching the folks they helped in the gut.

[i on the ball patriot]

Its all by design. It is a Strauss neocon financial global coup meant to morph the world society into their long stated goal of a two tier ruler and ruled world with the ruled in perpetual conflict with each other. The cheap to operate, low consumption, 'law' enforcement class will replace the very expensive, high consumption, middle class. The new unconnected rich will fall and the sell out media shills will no longer be necessary. A pity since they (both) smugly believe that they will be included and that this is just another round of exploitation of global labor.

This is a well orchestrated multifaceted plan now being rapidly accelerated by the financial ‘crisis’ component of it. Intentional credit bubbles, and over leveraged derivative products (financial system trust busting counterfeit money), dropped on domestic targets and ‘friendly’ nations are more powerful in destructive effect than daisy cutters and bunker buster bombs and they leave more resources unscathed. Review the events of a lead target; Iceland, and watch Europe dissolve into even greater chaos in the months ahead. Japan has been a mild pilot program for the coming, much more chaotic depress down.

Its half past recession, do you know where your CIA is?

[Neural forex]

Susa, thank you for link.

[DiverCity]

@ Susan,

I reject "collectivism" and all that it entails. This is not to pick on you, but we don't need to get in the mindset that "we" deserve this. "We," which would include "me," do not deserve this. "They" deserve this. I didn't overspend, incur massive debt and watch American Idol on television. No, I lived within my means, kept debt manageable and wrote to my Congress creatures regularly (little good that did me). Ergo, "I" am not responsible. On the contrary, "I" tried to stop this. I voted for Ron Paul. So "I" will not support "them what done it." "I" will withhold my support in whatever way "I" can, and all the rest of "you" should as well.

[vi]

People talk about pervasive corruption like it's some big new thing. This is just more of it than we've had for a long time. The developing countries are very familar with it and most of them adapt to it without too much instability. A ruthless official entrapment campaign would help a lot - use our metastasizing police state to purge the placemen. In the meantime a little consumer's strike right now would help concentrate the minds of the elites.

[Peter of Lone Tree]

Might be a bit of an overstatement, but not by much: It all started with the Butternut Agreement and the formation of the first stock exchange in America in 1790.

[Dave]

@ divercity,

Amen brother, your story mirrors mine. Now I intentionally spend ONLY on necessities. I only have a mortgage to pay, all revolving debt has been paid off and no car loans. I refuse to give them my money, I refuse to buy useless crap from China, I refuse to buy anything that is not a real need. I am trying to starve the beast in my own little way and all of you should as well......

Ron Paul tried to warn the people and he was laughed at (as was I when I told people about him). Stay out of debt, pay down all debt, do not incur new debt...... STARVE THE BEAST to death.

[Fat Man]

I like the last point about revolution. I'm not for revolution though. I'm for secession. If my state (Texas) were to secede, I'd be happy. I don't really feel like bailing California and New York out any more. Free Texas now!

[rafael chat]

This crisis might end up on World War 3

[John]

For those that actually talk with the real peasantry (the semi-psychotic majority) have you noticed how they (the peasants) are much more pissed out of their minds about bailouts for OTHER peasants than they are about the nobility. Oh sure, they might complain about "rich guys" getting some tax-money but their REAL anger is directed at "those lazy auto-workers". I find US peasant self-loathing to be the wild-card in any future "plans" for the up-coming socialist state. The US peasants are truly odd ones. They’d much rather cut-off-their-noses-to-spite-their-faces than peasants in other countries. Your fascist Republicans have always been able to use this trait to their advantage. Too bad the socialist Democrats have yet to figure it out.

[Forex trading systems]

DiverCity is absolutely right in "collectivism" rejection.

[Max Volatility]

John

You are right on target. I know a newspaper editor (his newspaper supported the Republican candidates in the last two elections) who was blasé about the financial bailouts but furious about the GM bailouts. His mind is a perfect example of Republican thinking, and in fact arguing with him is what I'd imagine arguing with O'Reilly is like. Very little substance, but lots of clever "tricks" to throw you off balance in a debate.

After talking with this guy extensively for the last two years, I have concluded that I will never read a newspaper again.

It'll be amusing to see what he thinks about the upcoming newspaper bailouts.