Wikinvest Wire

Obama trying to "prop up life as we know it"

Tuesday, March 24, 2009

President Barack Obama will address the nation later today, in part, to urge international leaders to join the many and varied efforts by his administration to rescue U.S. and global financial markets from their seemingly inexorable march into an abyss.

In this commentary, Jim Kunstler speculates on what might really be going through his mind.

If central casting called for a poised, straight-talking, and capable-seeming president, it would be hard to come up with someone better than the Barack Obama who walked and talked around the White House grounds with Steve Croft on "60-Minutes" Sunday night. He may perfectly represent the majority who elected him, though, because he also appears to be in full commanding denial of the realities overtaking our American experience.

Those realities include the fact that we can't possibly return to the easy credit and no money down "consumer" economy no matter how many nominal dollars get shoveled into the fiery furnaces of banks too-big-to-fail.
The public can't process this reality and the president, for all his relaxed charm, is either not ready to articulate it, or can't process it himself.
Of all the most cogent criticism that has been heaped on all the bailout efforts to date, they all boil down to pretty much the same thing - we're trying to sustain the unsustainable and nobody really wants to admit it.

Not Washington, not Wall Street, and not Main Street.

Most of the country (and nearly all of its policymakers) are still steeped in denial and the thought of having to remake the system from the ground up is just far, far too unfathomable.

More from Jim who now has a new photo up at his blog and apparently doesn't quite know the FOMC from the FMOC (whatever that is).
In retreat from this reality, we've set in motion two forces that are pretty certain to bring us to grief. The first proceeds from the fateful FMOC decision last week at the Federal Reserve Bank to begin buying massive amounts of our own treasury bonds and bills. This is predicated on the idea that the mechanisms of wealth production -- even of illusory wealth, such as the fortunes created by trading securitized unpayable debt -- can keep chugging along, spinning off limitless additional suburban villas, chain stores, car trips, and deep-fried snacks. It would be sententious to explain how this destroys currencies, but wherever "monetizing debt" has been tried before in history, that is the outcome. The result would be ruinous at every level and would lead straight to the second terrible force: social upheaval brought on by the conversion of economic problems into political turbulence.
Given all this, it's kind of hard to believe that the savvy, thoughtful Mr. Obama is going along with such a disastrous program as the one his "team" is rolling out. Perhaps his ease and confidence masks a tragically conventional world-view, an incapacity to imagine "change" outside a very narrow range of possibility. I must say I doubt this is the case. I think, he is going along, for the moment, with a consensus of wishes to prop up life as we know it at all costs. This consensus emanates from the top down and the bottom up. The millions of "Joe-the-Plumber(s)" out there don't want to rethink the terms of existence anymore than the lords of Goldman Sachs. I also think that circumstances will force Mr. Obama's hand before long -- specifically that a moment will arrive when he goes on TV and tells the American public that things have changed way beyond the scope of what they even imagined when they pulled the levers last fall and voted for an uncharted future.
Jim goes on to talk about what is now commonly referred to our current "sucker" stock market rally and how anyone holding U.S. Treasuries might want to consider their exit strategy.

As usual, well worth the time to read, though not something that is likely to lift any spirits.


Anonymous said...

Kunstler's work is great! (I have read his blog for years; TLE and WMBH too)

He has piercing insights into a number of important trends; he has a writing style to match.

I wonder though: Why is he incapable of piercing the smoky aura around the Obamatuer?

That Jim countinues to drink the Kool-Aid makes his writing hard to read these days. When will he stop apologizing for "the one"?

Tim said...

I think he's just trying to give the guy a chance - it's only been two months. I've been criticized for this as well.

Nick said...

I don't subscribe to the idea that Obama doesn't know what's going on, and/or doesn't have the will to tell the American people the truth. I have seen and heard several flashes of seemingly unscripted insight from him that suggest to me that he knows exactly what is going on, and everything he's doing is carefully calculated to the ends he's trying to achieve. I think the common misconception (which is very purposefully constructed) is that Obama is doing whatever you (the individual) wants, when in actuality Obama is doing what is best for his agenda, period.

Assume for a moment that Obama has no interest in helping the economy, but rather wants to socialize the banking industry, regulate private businesses, impose salary restrictions, increase government oversight and control of private businesses, and generally further the liberal agenda. One thing he must do is stay in sync with public opinion: hence the need to spout whatever populist outrage is currently in vogue. Another is to keep introducing more intricate, obfuscated, and fundamentally flawed plans to funnel more money to the failed banks, so that when you eventually pitch increased oversight and outright nationalization, the public gets the impression that it's not only the "last resort", but the "least bad" of the various "solutions" proposed or tried. You can see the same trend forming for government control of compensation in private industry, new regulations on businesses, etc.

Obama is doing a good job furthering his agenda, despite how incompetent he may appear to be in terms of understanding or dealing with the situation. People just misunderstand what his goals are, and what he's trying to accomplish.

Anonymous said...

Sorry Nick but I don't think so. Sure he wants universal health care, green energy, high speed rail, and maybe more union power, but in no way does he want government control of banks and wall street. If he did he would not be doing bush's "cash fo trash" program with his 90% public, 10% private "solution". This is socialism for the rich if anything! I wish he was more like you think he is.

Anonymous said...

Hello All,

I don't think Obama or Getiner have much of an agenda. Basically believe that all the Kensyian's have fallen on their faces and their framework collapsed. Obama is of course clueless on all of this. He already showed some clumsiness dealing with China and Mexico. Expect more of the same from Obama, Hillary and Rham. These guys are only used to negotiating from a position of strength. Should be interesting to watch how much of a mess they make. A couple of protectionist moves and further stupidity from the Fed might make some abrupt dollar moves. I figure its inevitable with the people surrounding Obama and he might turn into a one term president.

Like several other plans that have come along; these are being written by bankers themselves. Remember the BOA bailout bill?

Now, we are in the unfortunate situation where the banks are dead shells that only exist to enrich a few banking insiders. Besides the criminal element there, another group realizes they will eventually be fired or worse and are cashing in as much as possible.

Good luck,

John S said...

Another possibility is that the most spectacularly unqualified man to ever reach the White House is completely overwhelmed and is content to read whatever his handlers put on the teleprompter. It's the "Obama isn't the real president, he just plays one on TV" scenario. I'd love to know who's writing his daily lines. Then we'd know who the "real" president is. I'm praying it's Bill Clinton. Most alternatives would be far worse.

Anonymous said...

Yea if he wanted socialism the banks would be nationalized already. Hint: it's not socialism they're aiming at.

Anonymous said...

"Welfare For The Rich" is such a clumsy term. A far more accurate & historically correct term is FASCISM. The beneficiaries are the privileged & elite. The financial types always call something political they don't like Socialism. Fascist, the term is Fascist.

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