Tuesday, March 10, 2009
It has long been my considered opinion that, in the end, there is only one economic report that really matters - unemployment. Realistically, in a world bursting at the seams with distractions, whether prices are rising too quickly or if economic growth is too slow makes little difference to most individuals.
Sure, you'll hear complaints about how budgets are being pinched as the cost of living rises or how the U.S. economy measures up against our competitors overseas, but, in the mind of your run-of-the-mill American citizen, the importance of this kind of thought pales in comparison to the real or imagined prospect of having their income slashed to zero.
More importantly, your run-of-the-mill American citizen has little understanding of, or appreciation for, the well-worn phrase "idle hands are the devil's tools".
With unemployment now soaring past eight percent, on its way to perhaps ten percent, and with other measures of joblessness about double those figures, it is not hard to imagine how things could take a nasty turn for the worse during a long, hot summer that begins in just three months, particularly in the harder hit metro areas.
Not one to mince words, Jim Kunstler sees the prospect for a startlingly quick change in the mood of typical Americans in his latest commentary:
Now it has come to light, just last week in the wake of AIG's latest bail-out, that previous AIG bail-out money to the tune of $50 billion was distributed to a set of banks including Goldman Sachs (former employer of then Treasury Secretary Hank Paulson and then New York Federal Reserve Governor Tim Geithner), plus Morgan Stanley, Merrill Lynch, Mr. Lewis's Bank of America, and a long list of European banks with operations in the USA. Since the transactions took place in New York State, the investigation of these irregularities alone could solve the unemployment problem here if NY Attorney General Cuomo were given a free hand in hiring staff to depose everyone involved -- including the hiring of caterers to bring in coffee and meals for round-the-clock proceedings.With the government's response to the crisis continuing to appear heavily slanted in the direction of big banks and big Wall Street firms, the increasing number of idle hours on the hands of the masses could certainly pose a whole new set of problems for the Obama administration.
The bigger question for now is whether any of these authorities will act effectively before the public simply goes apeshit and starts burning down Greenwich, Connecticut. The dangerous shift in public mood is liable to occur with shocking swiftness, in the manner of "phase change," where one moment you see a bewildered bunch of flabby clown-citizens vacuously enraptured by "American Idol," and the next moment they are transformed into a vicious mob hoisting flaming brands to the window treatments of a hedge funder's McMansion. The moment of opportunity for avoiding that outcome is looking sickeningly slim right now.