[lit-ideas] Tom Friedman's Article
- From: Andy <mimi.erva@xxxxxxxxx>
- To: lit-ideas <lit-ideas@xxxxxxxxxxxxx>
- Date: Wed, 28 Sep 2011 07:08:18 -0700 (PDT)
I read Tom Friedman's article. The sovereign debt that Friedman is talking
about is of course the PIIGS (Portugal, Italy, Ireland, Greece, Spain). At the
moment they are the most severely affected by debt. We're actually the worst
in debt, but they're feeling the effects first; Greece most of all for now
probably because they're the smallest. If Greece defaults on its debt,
investors lose whatever they've invested in that country. Investors are hedge
funds, pension funds, mutual funds, banks, construction companies, etc. They
all lose money. If they lose money, people who have money in mutual funds,
construction stocks, whatever, don't get paid and a deflationary cycle beings
(i.e. if people don't get paid, they can't buy, if they can't buy, there's no
reason for factories to make things, if factories aren't working, people aren't
working and can't buy and it begins to spiral downward into depression). So
Friedman is working off the
deflationary model. The contagion is when the other countries begin to
default on paying back loans and everybody goes into a depression. Depression
is what the Fed is terrified of, and apparently what Tom Friedman is afraid
of. Depression is why the Fed is promoting inflation.
I think what Friedman is saying is that we, the U.S., are also in a sovereign
debt crisis. We are up to our eyeballs in debt along with everybody else.
However, what he's not saying is that corporations were the cause of this
problem. Corporations were promoting debt on steroids, especially in the real
estate market. NINJA (no income, no job) loans, liar loans, banks and other
financial corporations were giving mountains of money to anyone with a pulse,
never asking if they could get repaid, just lumping the loans together and
selling them to each other as sound investments, which again means hedge funds,
pension funds, whatever anyone was invested in. These 'investments' were given
the highest rating by rating agencies. It was the way to make money out of
thin air basically, greed run wild, the financialization of the economy instead
of old fashioned manufacturing. The corporations during the housing bubble did
everything in their power to
deregulate, i.e., remove government's role in slowing them down from selling
this stuff. When people began to default the whole thing went down and it was
all government's fault for not regulating.
Goldman Sachs was a prime mover in advising Greece all along. However, if
anyone watched that documentary on Monsanto, they'll see that government and
corporations are virtually one and the same, not just in food but in all
corporations, whether it's news, transportation, anything. Corporations make
the laws, Congress rubber stamps the laws. The bottom line with Goldman Sachs
and with all corporations is that they're out to make money for themselves and
their investors. They absolutely absolutely do not care about the country or
anybody in it.
Today deregulation is continuing, also on steroids, in the form of the tea
party, who the Republicans are manipulating to eviscerate government
altogether. They're defunding the EPA, which is to say our air and our water
is now industry's to do what they want with. That's where we're different from
the 90's. In the 90's people got it that the government was on their side.
Today people are brainwashed that government is the enemy. They want Obama to
do something, but Obama is like all presidents, another pretty face while
corporations rule. We aren't a capitalist country. We're a corporatocracy.
Capitalism is based in competition. Corporations do everything they can to
eliminate competition so they can make money for their shareholders. That's
why they exist, literally. And they have all the protections of
people. Recently the Supreme Court ruled that they can donate as much money as
they want to election campaigns, no disclosures
are necessary. The power they had is now logarithmically greater.
Enter limits to growth and resource depletion which says growth is over.
Without growth, investment is over. That's where I don't understand Goldman
Sachs. They know about oil and all the other commodities. Goldman Sachs
thinks this is the 30's all over again and they'll make lots of money off of
it, and they may, for a while, but how do you keep cooking when your pantry is
emptying out? It's like they're in denial seeing only dollar signs. And
they're the ones who are advising everybody else. In fact, they effectively
run the government. Hank Paulson, secretary of the treasury under Bush, had
been a CEO of Goldman Sachs. The Goldman Sachs pedigree runs throughout the
political system, whether state or federal. Effectively, they rule the world,
and they're making money no matter what happens, at least for now. Corruption
on Wall Street is so endemic and so widespread that it collapses countries.
As far as Tom Friedman, he does campaign for the climate, and that's a good
thing, since that's resource depletion in the end. However, he does it from
the perspective of keeping the status quo with renewables, and that can't be
done. Everything has to be rethought from the ground up, transportation, food,
everything. Certainly junk will go away. Humans are not stepping up to the
rethinking plate, so nature will do it for them. In the end, nature bats last,
and a system based on rabid meaningless consumption had to end up this way.
I'm seeing a paradigm shift in the making, but the good news is that once it
all shakes out, the world will really be a much nicer place. Getting to that
place might be a little lumpy, or not, depending on how much kicking and
screaming we do to hang on to the old ways. We'll just have to wait and see.
Andy
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