An Economy on the Brink

First posted 8-28-05 n the original Whistling Dog.

It's been a long three years since I first posted two commentary articles in AsPerceived.com.

The first article, "Ten Months Later, Part 1" (see "Three Years and Counting" in the index at right), primarily looked at the Bush Administration's failure to turn the goodwill America enjoyed after the catastrophe of Sept. 11, 2001 into a new era of world cooperation.

The second article, "Ten Months Later, Part 2," posted below, continued that analysis, but from an economic perspective.

My father was a fine politician and a fine stock broker. He taught me some important lessons that prepared me well for such surreal times as these.

One of the most important of these was: "Don't believe most of the 'hooey' that passes for reasons the markets did this or did that from day to day. No one really knows why the markets do what they do."

That lesson was salted by a more important one: "Good economics is just good sense."

In other words, "On the surface, the world of money looks crazy, but don't let that create an excuse to throw caution to the wind, or pretend that up is down. The 'laws of physics' govern economics just as they do everything else in the four dimensions we occupy."

It's too bad George Bush never met my father, though I doubt it would have made a difference. As my very Republican mother recently observed, Dubya is a "pathological narcissist," strong stuff from a woman who has voted a straight party ticket her entire life. But she truly wants to see Georgie taken to the woodshed as much as I do. No wonder W's approval ratings have fallen of late.

I wish the country had not slept through the past 38 months, but time will tell. George may yet receive the cosmic paddling he deserves.

And remember, these essays were written three years ago.

Here is that second AsPerceived.com article.

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AsPerceived.com
June 24, 2002

Ten months later - Part 2

There was an old man. He lived in a cave. He had so many enemies, he didn't know what to do. Then one day he thought: What if I just help my enemies destroy themselves?

What if they declared a war, and nobody came?

Was Osama bin Laden's real objective to set the US on its current self-destructive path? If so, it would be the ultimate irony of the so-called "war against terrorism."

As if in some kind of narcoleptic daze, the Bush Administration is still in denial of what is happening to the US economy.

One week it's trying to sell its privatization "cure" for the Social Security system with one hand, while another week with the other hand, it deals out corporate largesse, guts environmental regulations and abrogates long-standing trade agreements by jacking up protective tariffs for steel and agriculture.

This week, the President publicly challenged corporate America to clean up its act. What George Bush is really afraid of, we can guess: contamination. There is an election coming, and the Democrats, finally, are beginning to smell blood.

The drums are beating already up on the hill as the Enron and Andersen scandals unroll into WorldCom and now Xerox scandals in a frightening, nauseating spiral.

Where will it end? Get ready. It might not end until the entire economy unravels.

Lynn Turner, former chief accountant for the Securities and Exchange Commission (SEC) from 1998 to 2001 and a former partner at accounting firm Coopers & Lybrand, told PBS' Frontline this week that Enron and Andersen are "business as usual" in the US today. The problems that created this debacle are "embedded in the system," he said. Turner also stated flatly that the fixes proposed by the Bush Administration's new SEC chairman, Harvey Pitt, would leave regulation of the US accounting industry "in the hands of the profession." Said Turner, "It's ...a non-starter." Not reassuring words for either US or foreign investors who are looking for some ray of hope right now.

But the Bush Administration appears oblivious.

History Keeps Repeating

As if none of this were happening, the White House continues to deny the unfathomable damage it has done to the US economy with it's robber-baron-inspired multi-trillion dollar tax cuts. Deny it or not, a once projected $5 trillion government surplus has now been turned into $100 billion annual deficits. A silk purse into a sow's ear, as they say in Texas.

The US Treasury is now backed into a corner with various unenviable choices: prevent a deflationary spiral caused by horizonless job layoffs, record personal debt and record bankruptcies, or stave off a growthless period of escalating inflation caused by high oil prices, overcapacity and interest rates that will invariably rise to attract investment. It may even have to do both, at once. Perhaps it is still too early to tell, but it would be a rich irony if George II fell victim in the end to the same admonition that sacked his father: "It's the economy, stupid!"

What a fitting end this is to the great "tulip bubble" of the 20th Century: the Internet. For five years at least, America's technology-driven "New Economy" defied the laws of economics, good sense and maybe even physics, but as the skeptical predicted, it became at last the "dot-com bomb", a phrase for the history books. And now the rest of the economy is beginning a slow-motion implosion. That can't be good for the "war on terror."

At the same time, in America's own backyard, Argentina dissolves into a financial quagmire, Brazil melts under mudslides, Venezuela quivers on the edge of a coup d'etat in which the US is apparently complicit, Mexicans fall victim to a reign of terror from organized kidnappers, death squads return to Central America, and Colombia faces a descent into jackbootland as the US-led drug wars destroy the lives of countless campesinos and the fabric of an ancient distinguished culture.

Is it any wonder that Dubya cannot make his "you're either with us or against us" tough talk and his Administration's "go-it-alone" policies convincing? He has failed to succeed, on all fronts, and worse he and they have failed to notice it is failing.

Even Congressional Republicans are openly voicing their doubts on domestic issues ranging from Enron to Homeland Security to civil liberties. Only Israel gets unqualified support in the US Congress these days, and that in itself, is baffling to much of the world. About everything else, the Administration and the Congress say nothing or speak in an incoherent Babel of overlapping and conflicting voices and interests.

While the Bush Administration has lurched this way and that, the leaders of the world have grown increasingly silent. One wonders what they say behind closed doors in Dubai, Johannesburg, Oslo and Canberra. At the only uplifting event in recent weeks -- the installation of a new government in East Timor - a much different US leader, former President Bill Clinton, represented the US. Were the other world leaders at that ceremony wishing he still were President? I imagine so.

It's not easy to gauge how Bill Clinton or Al Gore might have handled September 11 and its aftermath. But Clinton's easy touch and compassionate manner were evident as he walked the streets of New York in the days that followed, while George Bush managed a few bits of stiff posturing and platitudes. What the world, and the US, need now is a generosity of spirit, and this new Republican Administration is incapable of delivering it.

Where are the voices of reason?

Why can't the Bush Administration comprehend that fewer and fewer people are listening to its pronouncements? Comforted by the latest poll numbers, which seem to pat the president on the back week after week, George Bush and his associates have become the proverbial frogs falling asleep in tepid water. But the poll numbers are deceiving.

Although some writers in the US have consistently criticized the Administration, voices abroad have been loud and derisive from the start of the Bush "war on terrorism." There are signs already that the world has had enough. Some tea leaves can be read in the financial pages.

In recent weeks, the dollar and the equity markets have finally begun their long-anticipated slide into Correction Land. The US tech stocks have already dropped deeply into bear country. The broader markets won't be far behind. Thinking people around the globe are beginning to doubt what America has to sell, both financially and ideologically. It won't be long before foreign investors start heading for the exits. What happens when the Thai Bhat's experience is repeated with the dollar in London, New York or Chicago one morning?

Don't think it can't happen. That tea is already brewing.

Like Martin Luther's demands nailed to the front door of that German cathedral 500 years ago, a pile of disappointing news reports grows higher day upon day at the White House door, and at America's feet.

It has only been 10 months since our world was rocked by the horrors in New York, Washington and Pennsylvania. Almost every person on this planet who had access to a television, a computer or a radio witnessed those events.

Europe and Canada stood still for a moment the Friday after, when the world stop to pay its respects to the victims of 9/11. In Iran and Russia, people sang the Star Spangled Banner. An editorial writer in Bulgaria wrote a glowing elegy to the bravery and sincere patriotism of Americans. It circulated hand to hand via the Internet to millions of eyes around the world.

In mere moments, the events of September 11 engendered the greatest outpouring of heartfelt good will for the US that America has ever, and will ever, know. The world was changed for an instant. We all were brothers and sisters, with one boundary: the sky.

But then America drew its angry line in the sands of Afghanistan, and the world paused.

Even so, the world waited for the America of its dreams to show up: a cowboy sheriff in a white hat and a shining star, six guns blazing, galloping his horse down a dusty street to save the town from bandits and rescue the damsels in distress.

George W. Bush, Texan dude, played that role to the hilt at first, and for awhile it worked.

But good guy sheriffs aren't supposed to sit down for a crooked game of cards with the bad guys, or shoot themselves in the foot repeatedly, or fall face down in the mud in front of the children and old ladies. Nor does the script allow the sheriff to shout at that blue Western sky that his problems are the fault of everyone else.

Now it appears that America may have squandered its moment. "George II" may have frittered away the precious opportunity he had to forge a new consensus in the world after those galvanizing events of September 11. His father,too, once failed to "secure the peace" after the Allied forces reclaimed Kuwait from Iraq.

Like father, like son?

Ebb tide

Very quietly and sadly, the tide of credibility is ebbing away from the US. When the tide returns, we may find that a kind of reformation has inexorably begun in the world.

That process may eventually help the world find new heroes to emulate, new leaders to follow, and perhaps one day create new coalitions or forces that may even eclipse the US. This process may, in fact, already be irreversible. We cannot know that yet.

However, we do know that the events that have forged this turning point have been so extraordinary that people everywhere have been shocked into a new sense of themselves, their communities, their cultures and their nations.

For better or for worse, each of us sees the world in a new light since September 11, and the US and its Administration has failed to capture the imagination of the world to envision a different future.

A few thinkers, such as Observer columnist Will Hutton, have already noted this shift in print. In his new book, "The World We're In," Hutton posits that Europe is already the natural counterweight to US influence and economic might. He carefully makes the case that Europe cannot escape this destiny, and for the good of everyone, Europeans should wake up, grow up and get on with it.

But is Europe truly ready to take up the mantle of leadership from America and guide the global community into a saner future?

Throughout the Continent, right wing parties wave ancient nationalistic banners of xenophobia toward immigrants, and they have made startling political gains. Instead of moving ahead on their historic quest to create a united more humane Europe, urbane politicians in Brussels, Strasbourg, Vienna, Berlin, Paris, Prague, Copenhagen and Madrid are trying to figure out how to tighten Europe's borders. Will a fortress Europe ever have the stomach or the clout to mount a credible challenge to American economic and political hegemony. Not if Europe abandons its hard-won principles of liberté, egalité and fraternité.

But the US, too, seems to have abandoned those principles in the face of danger, or at least its current government has.

But nature, and history, are forces, too. Flowers bloom through cracks in sidewalks, and aways will.

This week, a small ironic twist of fate may quietly mark this moment like an anecdote in a college text book. According to the New York Times, the 15-nation EU recently filed a brief with the lofty US Supreme Court. That brief may have influenced the court in its decision this week to ban capital punishment for the mentally disabled, over the objections of the Bush Administration and John Ashcroft's Justice Department. In small ways, Europeans are already upstaging the US Administration in their own backyard.

Whether Americans or America's supporters want to believe it, another historical train is leaving from yet another station. It could indeed be headed away from America, but the destination is unknown, the driver is unknown, and the railroad company remains anonymous. Still, this train is leaving, with or without the US, with or without America's consent.

In fact, there are a lot of folks out there who hope America will stay home this time, consumed in its own problems, stewing in its own juices, playing its sad song over and over again, like Humphrey Bogart in Casablanca. The cynics reason it might make this next stage in human evolution easier if America missed the train altogether.

But I believe, that would be a sad outcome. Without the contributions of America's best and most principled thinkers, artists, humanitarians, civil libertarians, economists, educators and just plain citizens, this new Century might also all turn out very, very wrong.

It's up to America's citizens now to convince the rest of the world that it still needs the US, and to convince themselves that they need the rest of the world. Right now the jury is still out on both counts.

The Bush Administration has already made its decision. How about you?

By the way, has anyone heard from Osama lately?

Copyright © 2002 AsPerceived.com