Wednesday, January 14, 2009
VECTORS OF POWER
Here's a nice, bitter pill for your morning:Today, however, our dependency upon foreign investors will approximate more and more the state of international indebtedness we historians associate with the reigns of Philip II of Spain and Louis XIV of France -- attractive propositions at first, then steadily losing glamour.
It is possible that the early sales of Treasurys this year could go well, since panicked investors may prefer to buy bonds that pay nothing to shares of companies that may go bust. But certain sharp-eyed analysts of the Treasurys market already hint that the appetite for Obama-bonds is limited.
Do people really think that China can buy and buy when its investments here have already been hurt, and its government can see the enormous need to invest in its own economy? If a miracle happened, and China bought most of the $1.2 trillion from us, what would our state of dependency be then? We could be looking at as large a shift in the world's financial balances as that which occurred between the British Empire and the United States between 1941 and 1945. Is everybody happy at that? Yet if foreigners show little appetite for U.S. bonds, we will soon have to push interest rates up.
While I disagree with some of the identification of causes in this piece (it is all laid far too readily at the feet of the hated Bush), the basic economic logic of power described here is inescapable.
So ... it's time for me to ante up something positive, some prescription for how to escape this death-spiral. The problem is what I think of as "financialism:" the idea that all the problems and all the solutions are somehow to be found in the manipulation of money in ever-more-sophisticated ways. Both the monetarists and the Keynesians get this wrong. You simply can't make something from nothing, no matter how clever you are.
An extremely gifted financial operator told me a few weeks ago that the only way out of the mess we're in is inflation -- printing money. I don't doubt that the radical first-aid required at this point to keep the patient alive long enough to get to the hospital involves a massive dose of inflation. It's analogous to pumping fluids into a bleeding man going into shock. But in the long run, inflation is just an emergency measure, and one with its own dire consequences if kept up too long.
No, there's only one long-term solution to the problem. We -- the American people -- are going to have to earn our way out of the hole we've dug ourselves into the old fashioned way; by creating something real that other people in the world want to buy. If we don't see that, if we don't take the distorting glasses of "financialism" off and see the world as it really is, we can kiss "the American dream" goodbye.
Barack Obama will either see this, and deliver this news to the American people, or we are well and truly doomed to second-rate status as a nation and a civilization -- at best. Why it has to be Obama who does this is the subject for another post ...
GB, THHotA
posted by Greg 8:11 AM
Monday, January 12, 2009
CULTURE WAR CONTINUES
This note describes what would once have been unthinkable, David Horowitz appearing at a meeting of what might be considered the headquarters of the post-modernist domination of academia, the Modern Language Association. I have many friends who tell me that my decades-long focus on the pomo infestation in academia is misplaced. They say one or both of two things: (1) It's not as bad as I maintain, or (2) it was bad, but it's fading and no longer important. As I've written here many times, I reject these critiques. The moral relativism and stealth Marxism of post-modernism is still alive and well in academia, and has a deeply pernicious influence on our culture at large.
GB, THHotA
posted by Greg 8:11 AM
Friday, January 09, 2009
SUCKERS
The mainstream media, in the tank for Hamas.
They never learn. And they don't care.
GB, THHotA
posted by Greg 8:57 AM
Monday, January 05, 2009
HAPPY (?) NEW (?) YEAR (?)
... and a note about fantasy
In earlier times, this blog had an impressively large readership, given its modest scope and narrow personal focus. Months of neglect should have done away with that. For the friend, acquaintance or random web surfer who stumbles into this dusty, neglected corner, I offer the explanation for the unkempt condition here that I have been working on a major project that has taken up all of my free writing time. Whether that project will ever come to anything is a question that won't be answered for some time and, until it does, I shall leave it as a matter that won't be addressed here: To disclose it publicly would be to doom it to certain failure.
In the meantime, the world as we knew it continues to unravel. More than once I have considered beginning the project of recording some thoughts about that here ... but the job of doing so systematically is more than I can undertake now. On the other hand, I may well jot a note or two here from time to time about the nature and extent of the disaster overwhelming the world. In that vein, consider the following:
There were a number of absurd fantasies abroad these last ten years or so upon which much of the now-disappearing world was premised. One of them was that the swift erosion of the American industrial economy was somehow made irrelevant by the rise of "the information economy." The absurdity of this notion can now be seen clearly. You can't eat bits. Nor can you wear them, drive them to the store or live inside of them. And bits are the first thing to go when people are forced to retreat to primal priorities such as the simple survival of the flesh. At a certain level, a great deal of the illusory growth of the American economy over the last twenty years boiled down to a mutual fantasy pact: We all agreed that information was something it wasn't.
Consider how seductive this mutual fantasy was for intellectuals: The very stuff they were good at -- ideas -- was the thing we shall build our lives on. The age-old Platonic dream of a world where Idea literally is Real was to ... become Real. Literally saying so would make it so; the ultimate wish-fulfillment of the intellectual.
As they say, NOT.
GB, THHotA
posted by Greg 8:43 AM
