Peaks and Troughs

The principle peak is the Autumn foliage, which is resplendent now, or would be if the rain would stop for long enough to get more than a glimpse of the wondrous colors all around us.  It’s a bit earlier than usual, and the rain will make it a short passage to bare trees, but each year has its own nature and flavor to it.  The weather remains relatively pleasant as well, with temperatures still averaging in the mid-50’s, and the sun feels warm and good on the few occasions where it has shown itself.

The principle trough would be the worsening economic situation.  It’s at this time of year that the pundits and analysts attempt to figure out whether it will be a good or bad Christmas season, and the majority of reports that I have seen seem to imply that they haven’t got anything good to say, so they are saying the season will be ‘flat.’  Since this is optimism at its best, I think Christmas this year will not be good for the retailers, which means that fewer people will be added to the seasonal work force.

Behind the rather shallow news of the impact of the Holiday season, economic indicators seem to be worsening in a steady and consistent fashion.  Several bloggers are now moving from ‘things are bad’ to ‘OMG!, things are terrible.’  One such blogger, Ed Harrison, at Seekingalpha.com elucidates a lot of evidence that the recession is over, the depression has just begun.  The thrust of his article is that the debt situation has not eased, but has only been massaged to the point where it doesn’t look so bad at a national level, but the severe impact on the states continues.  It remains to be seen if California will be the first state to fiscally default on its obligations.

Another blogger, Jim Willie at GoldenJackass.com, sees systemic failure approaching.  He foresees “a failed US banking system (as in seizure) and a USTreasury Bond default (as in coerced restructure).”  Many of his themes have been echoed by bloggers around the net for a few years now, and his post is a concise summary of both the pathos of the situation as well as the personal anger that it can create in a thoughtful person.  The tone of his post is revealed in his characterization of the American people: The last people on the globe to comprehend the American condition of failure, corruption, and military aggression seem to be the Americans themselves, who live within the USDome of Perception. They suffer from perhaps the worst education levels in the industrialized world, coupled with a co-opted national news media network, clouded by the grandest drugstore medication in history.

I must confess to sharing many of these views: that America is rapidly approaching some form of economic collapse; that unemployment, underemployment, and ultimately, hunger, will grow at a rate currently deemed impossible for this nation; that the military will be utilized to maintain control of the populace as things begin to break down; and that prison camps will be utilized to control the ‘dissidents,’ who will finally find their voice too late and attempt to bring ‘American frontier justice’ to a failed country, which they themselves helped create.

Although these views seem severe, if not lunatic, it should be remembered that we have been, and still are, rapidly sliding down that slope of economic morass.  The bailouts, which were started by the Bush Administration, have continued and even grown under the Obama Administration.  These handouts to private industry from the American taxpayers are measured in the trillions of dollars.  We toss the term ‘trillion dollars’ around as if we really know what it meant, but we don’t.  To help understand, here is a simple pictorial representation of what a trillion dollars is, if we start with a single $100 bill.  This representation is a critical piece of knowledge which should be seen by every taxpayer.

And with every day that goes by, the number of those taxpayers is lessening.  Since December, 2007, the American economy has shed over seven million jobs.  That averages out to be a loss of 11,000 jobs a day for almost two years now.  Remember the Economic Stimulus legislation?  That was 3/4 of a trillion dollars spent to help the economy recover.  And yet where is this recovery?  Unemployment inexorably continues to rise, standing now at close to 10%.  The housing market continues to flounder, and all indicators point to bigger problems with the reset dates of Alt-A and option-ARM loans now coming into play.  The states, with no ability to print money like the national government and heavily impacted by the loss of revenues from property taxes and income taxes, are already drastically cutting back on all forms of social and educational services to the people, with a direct and dramatic impact on the poor.  And while the banking CEOs smile with their taxpayer-funded bonuses, more and more people, especially in California, the former land of opportunity, are living in their cars, or have become completely homeless.  They cannot find a job, with 6 applicants for every available position.  And a darkening future awaits not only them, but us all.

But, at least the Autumnal leaves are pretty.