Economic winter and empire's end

The part that is missing from this, that I would like to see discussed, and that seems, well, intuitive to me, is this:

The US does not do business in a vacuum. The roller coaster ride in US markets is, if anything, worse in foreign markets. What is the connection? What are the dependencies? Can we, reasonably, expect an overall adjustment in "economic power", such that the US remains in the top tier rather than becoming the poor, erstwhile emperor?

My expectation, all the painful parts aside for the moment, is that the US will descend from being first to being a big player amongst peers. This is a contradiction to the doomsayers, don't get me wrong, and a POV that seems much more reasonable to me than theirs. But I would very much like to see a discussion of this aspect.

Q: What do you say to the taxpayers who didn't participate in the borrowing frenzy of the last few years, who saved diligently and are now paying the price with their tax dollars? And who may have to pay it again when the baby boomers retire and the government raises taxes to bail out people who haven't saved?

Regardless of what you would say to those people (of whom I am one), I know what they (I) will infer: "Sucker".

"America will just be less influential. It will be poorer. It may be the end of the empire."

What kept us going for so long. We sell protection! To Arab Shieks we sell protection and they price oil in dollars so we have petrodollars instead of gold backed dollars. That is what Desert Storm and the 2003 invasion of Iraq were all about.

I fear an Obama presidency, but as something of a libertarian there is a possibility that this may be the possibility for a process: 1. First we end the warfare state. 2. Then we end the welfare state(s).

This may take 8-12 years and a lot of pain and chaos and some civil strife but maybe the warfare-welfare state can be dismantled.

We have an economy where for years those on top kept yelling to those on the bottom, "spend more...spend more," and now we find that those on top are blaming those on the bottom for doing EXACTLY what they were told to do.

What has driven the growth in this economy for the past 30+ years? Consumer spending. What was behind that spending? An ever increasing amount of debt, both personal and public, that kept being rolled over with new credit cards, new lines of credit, second and third mortgages, and payday loans. But the voices on top of the economy, those in power, kept telling those on the bottom to spend more, spend more.

So those on the bottom did just that. They spent more. They bought the products that were advertised to them. They bought the larger homes that they really could not afford. They bought the second, third and fourth television, the second, third and fourth car, the video games, the computers, the iPods, the Wiis. They bought, and the economy soared. Those on top made big bucks and kept telling the rest to "spend, spend, spend."

Now, those on top are saying to those on the bottom, "You were stupid to spend that much. You were irresponsible to run up that much debt. You were reckless to buy a house you could not afford." And while they are doing this they are moving their millions to more liquid financial vehicles, working to secure their own financial house, and taking the money they received during the good years of consumer spending and squirrelling it away.

Sooner or later, folks, the little people on the bottom are going to take their last few dollars to the hardware store. They are going to buy some heavy rope, some 4x4s and 2x4s, and they are going to start building some gallows in the public square.

And then they are going to come for those who stood on top of this economy screaming "spend, spend, spend," and are now saying "stupid, stupid, stupid." They are going to drag them from their secure little mansions, and they are going to teach them an old fashioned dance they call the swing.

For the past two generations the message from the media and the powers that be (including our Presidents, Congressional representatives, leading economists, and pundits) is that if consumer spending decreased the economy would tank. Folks were encouraged to buy, and yes, to spend beyond their means with the wonderful credit cards that the banks and financiers kept sending them.

They did exactly what they were asked to do...spend their money to keep this economic growth happening.

Now you call them stupid for doing it?

Where's the rope?

Double talk or just plain ‘ol lying is all I have seen from the Republicans in this presidential campaign. One example, as far back as I can remember, the Republicans have been telling us that liberals are for big government and regulation. They have been telling us that laissez faire is the best thing for business and government. Privatization solves all problems: Social Security, Medicare/Medicaid, Fannie and Freddie, education, etc. - Bad liberals are in favor of taxes, big government and yes, more regulation. The Republicans were the party that favored no regulations or very little and liberals were the ones that wanted big government and regulation. Well, now the McCain campaign has a commercial out that blames the lack of regulation on, you got it, liberals. Now they are the ones that are in favor of regulation and even, nationalization (not to be confused with that dreaded socialism word). Folks, what we have here is pure manipulation. Whatever the Republicans do not like at the moment is liberal – evil. They can contradict themselves day and night and as long as they repeat these lies enough they count on their propaganda winning the day. When things fail they tell us we are in crisis and sooner or later they figure out a way to blame it on the liberals. There is no class war in this country because there is no one to fight. While the rich have become much richer - the rest of us have seen health care, education, food, energy, housing…go out of site. We have been taken in by the myth that we were Kings and Queens while working longer and longer hours to make interest payments. Now the party is over and we are seeing that the Kings and Queen are paupers with no cloths. The only question that remains is, are we going to learn from history so we can leave delusion? Well, if it is up to the party of the rich we will continue to be slaves while being told we are free and masters of our own destiny. All the while, they are banking on the naiveté of the masses fueled by lofty rhetoric: family values, patriotism, and capitalism. While they are walking away with the gold we are told that our problems are all due to liberalism. Maybe it is about time that we consider the possibility that the results of the last eight years are decidedly different from the results of the Clinton years and decide which party is really worthy of scorn and rejection.

I don't know where to stick this, but let me stick it here.

It is sort of taken as a given on this blog that "socialism" and "income redistribution" are bad things. The result is the American society we see before us, where the top 2% take home the majority of the cash income, and where there is a huge gap between the very rich and the very poor. (And a diminishment of the middle.)

There are societies where this is not true. The Netherlands is one. (I cite it just because I'm so familiar with it. There are others.) There are some Great Mansions, but really, not so many. And there are slums, but again, not so many. Most people are clustered in the middle.

I cannot convey to you how pleasant this makes life. My family lives in a housing development in a suburb of Amsterdam which has mixed-income housing to an extent almost unimaginable here. From what passes for McMansions (paltry by our standards, but oh well) to apartment houses with tiny units. All in the same area, everyone using the same parks, playgrounds and schools.

The Netherlands (like every other industrialized nation on the planet) spends less per capita on health care than we do. The Netherlands (like every other industrialized nation on the planet) has better health outcomes, statistically, than we do.

Now, according to Republican orthodoxy, this is a bad and evil situation which we should avoid at all costs, but I have to say that it makes for a pretty pleasant and secure life for my kids and grandkids. If I had little children and I could swing the legal and financial ends, I'd move there myself.

So what's the conclusion? That there's something wrong with this pleasant life because it doesn't conform to someone's economic orthodoxies? That we're not as smart as the Dutch so we have to make do with a crappy lifestyle?

(Please don't reveal how little you understand Dutch culture by countering this post by alleging that the Dutch are just murdering all their infants and old people. (Or that they're immoral for having prostitutes in windows or some such garbage.) Those misunderstandings would take a book to refute, and even then you'd have to live there to understand maybe. Americans. Wake up. Not all cultures are the same.)

Man, I love reading your posts, but for the past few weeks, I've been reading your depressed posts about how crappy the future might be and it makes me more depressed, and then I go and look for more news on the economic crisis, and it's more depressed stuff, and then I get more depressed...yeesh. Isn't it possible that there's a silver lining to all this? I mean, I'm a fan of the Benedict option, probably just as much as you. But like most of the folks in our society, I'm too attached to our ridiculous lifestyle to actually give it up and go the way of Sharon Astyk (thank you, btw for finding her for us). Maybe this crisis will be exactly the impetus we/I need to finally make the shift. As hard as that shift will be, isn't that ultimately a good thing, and a better thing for our souls?

Larry/ Old Susan;

Before you hail the Dutch and the French as examples to imitate you might want to check on how they are dealing with the ongoing meltdown and what predicament they are going into.

Ah, Scott, the people in the Netherlands are not so homogeneous any more....there is a HUGE influx from Moslem countries, and when I go to pick my grandkids at school I see a lot of headscarves. I don't want to minimize this situation - the integration of these two cultures is a major problem - but if anyone can solve it, the Dutch can.

Larry. Yes. As you say, consider France. The French, so far as I can tell, cannot find their butts with both hands, pretty much. And yet they have what is usually considered to be the best medical care system in the world. Far cheaper than ours, and far better in terms of outcomes. (Our nearest competitor for per-capita cost is Switzerland. Think. Switzerland. Who spend 1/3 less per capita than we do. And outcomes? It would be a joke except that it's not funny.)

So, the position, as you so clearly point out, would be, "We can't do as well as the French??

Oh my people.

And now for something completely different, from Justin Fox on the Curious Capitalist:

http://time-blog.com/curious_capitalist/2008/10/new_column_the_fundamentally_s.html

"My column in the new TIME that goes on sale Friday (it's got Lincoln, FDR, Obama and McCain on the cover) is already up online. It begins:

John McCain's claim that "the fundamentals of our economy are strong," uttered just before the financial crisis turned dire, may go down as one of the great blunders of presidential-campaign history. "Senator McCain, what economy are you talking about?" Barack Obama exclaimed hours after the words escaped his opponent's mouth. The mocking TV ads soon followed, and as the weeks wore on and financial jitters gave way to near collapse and certain recession, McCain's statement began to evoke unsettling memories of Herbert Hoover, who said similar things in the early 1930s.

Less likely to be remembered is running mate Sarah Palin's defense. "He means our workforce, he means the ingenuity of the American people," she said. "And of course that is strong, and that is the foundation of our economy."

Palin was actually on to something. Our workforce and the ingenuity of the American people are in fact among the most important of economic fundamentals. And it's not at all crazy to argue that these fundamentals are still strong."

Read on. I'm not used to being the optimist.

I want to talk about Dutch (and by extension, European) culture here, in the interest of fairness.

The Netherlands is the most densely populated country on planet earth, more densely populated than Bangladesh, more densely populated than India. Because of its extensive farmlands and cow pastures, it certainly does not give that impression, but it is.

Some say that the necessity of living in such close quarters has had a profound impact on the culture. Certainly the necessity of cooperation to pump out the sea and in effect create the land has created a very powerful collectivist culture.

You see it everywhere. At Nemo, the kids' science museum in Amsterdam, most exhibits require the cooperation of two or more children to make them work. This isn't a conscious decision on the part of the designers, this is just the way it is. You cooperate (right?) or you die.

I walk in the early morning (since I usually do childcare, the only time I have to myself) from my daughter's house to the canal (two blocks). Lovely. I can't tell you, seriously, how lovely it is. I grew up in Los Angeles, that is to say, in a desert. All that water!! You can smell it everywhere!

All the blinds and curtains in all the houses I walk past are open. (If you close your curtains, you must be up to something.)

And there are all the people, in their bathrobes, having breakfast. And I look at them. And they look at me.

Children are safe there. Why? Because everyone is watching. If you make a move to harm a child, all these people will dash out of their houses and beat you senseless.

We're not like that here. We have much more developed sense of individual rights, individual privacy, individual action.

Who's right? No one's right. It's just different.

The question is, can we find a way to take care of ourselves and each other, a way that works with our culture?

I think, as Rod posted the other day, that we may be in for a decade or more of rough times. This is not necessarily a bad thing, however, and I am actually somewhat optimistic.

But, perhaps I would be less so if I didn't have a job, or if I had a mortgage that I was about to default on instead of really cheap rent in a group house. The market was vastly over-inflated and the housing market was, too.

Wealth has to be built on something real, and what with all the derivatives and hedge funds and credit default swaps that were opaque and unregulated, it turned out that much of the economic boom was built on a house of cards. I think reality is better than denial, and I am with the commenter who said, that perhaps it will take a while for the American people to become stupid again.

Three cheers, or at least two, for common sense.

Comparing Europe to America needs to be done at the state level, because the economies are of equal size, and the populations more homogeneous. Compare Netherlands to Connecticut, or France to California. Or compare the EU to the US.

I met several well educated Frenchmen, Swedes and Germans in Asia who said they don't plan on going home anytime soon. They cannot find work in Europe and the taxes are too high.

One needs to realize that if all the doom and gloom that Rod likes to talk about comes true, with unemployment hitting 10%, the U.S. standard of living will be reduced to that of Germany and France at the start of the year.

Americans and Englishmen use hypocrisy as a means of social control

I don't understand this statement, coupled with your example of prostitution, at all. Do you mean that it's hypocritical to outlaw an activity, given that a certain number of people will pursue that activity in defiance of the law? Is it hypocritical to outlaw murder?

I'm another fellow who saw the insanities of the stock and housing bubbles and decided to save my money, rent rather than buy a house, etc... Not only am I "hosed" via taxes, but I'm hosed via the inflation of the money supply that is taking place right now. I believe inflation this sends a terrible moral message to those who work hard and save.

Hm. Well, I don't get the connection, Other Jim. If European men are "more romantic" so what? (This is not my experience, by the way.)

Whatever does this have to do with accessible health care?

If someone could explain the following to me, I'd be most grateful.

1. Why is it that we pay more per capita for health care in the US and get less for it? Where is all this money going?
2. If it is so wonderful to live under such a system as ours, assuming that you suddenly get sick or are involved in an accident, why is it so wonderful? (I understand, I think, why it's so wonderful if you don't get sick. It's just that no one can guarantee from minute to minute that he or she will be in this favored class.)
3. If your employer does not provide wonderful insurance, or if you are self-employed, having your employer allegedly provide insurance is wonderful why exactly? (If you work for Microsoft, please understand than not everyone does.)
3. If health services are used too much, who exactly are these people who get their recreational kicks missing work and sitting in doctors' offices? And how many of these people are there really?
4. How exactly do all the countries of Europe and the rest of the industrialized West manage to produce better health stats than ours with less money? And buying into this or a similar system would be a bad thing why?

I'd especially be interested in hearing from people who have health problems. The opinions of folks who don't are, well, sort of interesting but maybe not too much. Call us back when you actually need to see a doctor.

Rod, one gathers that you have a medically fragile child, as I did.

Let me hit you personally.

You work for a big newspaper. I have no idea what health coverage your employer offers, but I'm assuming that it's something at least.

So now put yourself into the position of someone who does not have such an employer, and who has such a child.

We, my family, were faithful to the teachings of the Church about reproduction. As a result, we had a child who was born with very serious mental and physical disabilities. I don't regret his birth for an instant.

But I'm wondering why our family has to bear this burden alone. Oh yes, we are all "community." Until it costs something. And then, suddenly, we are not community any more.

There are a number of such children born every year. Some are born to faithful folks like us; some are born to people who should not have children at all, according to some of your posters here. But whether or no, we are all of us, rich and poor, on our own. And the children, well of course they are blameless, but that doesn't help anyone.

We're "pro-life." Nice slogan. But when the "life" involved is less than convenient, "pro-life" evaporates, and the family with the impaired youngster, under this plan, is on its own.

You "conservatives" seem to take the position that it's our problem, not yours. Oh well, paddle this canoe on your own.
"Community" stops well short of your pocketbook.

Those of you here who don't think that government should help families like mine, well, where are we? We're on our own? A terrific witness to the gospel.

"We're "pro-life." Nice slogan. But when the "life" involved is less than convenient, "pro-life" evaporates, and the family with the impaired youngster, under this plan, is on its own."

The day the Church became more concerned with how pretty their building looked than how well they ministered to those in need among their membership the Church lost its first love.

The day the Church decided it was more important to have a trained choir and director than to have an effective outreach to the shut-ins and disabled in their community the Church lost its first love.

The day the Church decided that the benefit of a political party was more important than the benefit of the sacred community of believers entrusted to its care is the day the Church lost its first love.

Conservatives decry the proliferation of government programs for the poor and ill among us. They decry the increase in taxes necessary to provide for these programs. They decry the inefficiency of these programs, and the waste they generate.

Yet when they are given a chance through their local congregations to reach out to the community surrounding their place of worship, invariably they decide it is more important to vote pro-life than live pro-life. They decide it is more important to have a multimedia rich sanctuary that seats a couple of thousand, and a ministerial staff that is paid more than the President of the United States. They decide it is more important to condemn gays and lesbians than to carry water to the poor families that live just outside their spacious parking lot.

What is God to do for his suffering children if his church will not step up and care for them? Would a loving, caring father allow his children to die if it was within his power to save them?

Conservatives want to cut spending on social programs, many of which help people like your child, Old Susan. But they do not then come to their places of worship and insist that the gap be filled by God's called-out ones. Instead they sit back and talk about "my money" and "my rights" when they really have neither, if they actually believed what is said in the Bible.

I feel for you, Old Susan, for I have seen far too many churches turn a blind eye to those hurting in their midst. I have seen them walk away from families who lost jobs, thinking that somehow "God must be judging them." I have seen them begrudge a young couple the cost of a tank of gas to get them down the road to their parents, thinking the couple was simply trying to get cigarette money.

Love of money...this is what has replaced love of God in far too many congregations across this nation. And until that is corrected (and some lampstands removed from their places) no doubt God will keep the government involved to provide the services that the Church should be, but has chosen not to provide.

Yes the state does a lot of things the churches did in the past, for better or for worse. The most important difference is that the churches usually did not bring gunpowder (implicitly or explicitly) into the system as the state does.

Free giving to the less fortunate is best. Today there are tens of millions of people who would not dare ask their neighbor if they could borrow a cup of sugar but would collectively force him to pay for a lot more.

BTW: where I grew up in the 1950's neighbors borrowed things like sugar, flour, etc all the time.