Friday, 21 May 2010

Well, Well, Well

Well, it's been awhile. The purpose of this posting is for lacking credentials to get back on side and, more importantly, to get its mutha-effin groove back. I have been busy lately, on the road here, quitting a bullshit job and starting a new better one there, and drinking beer, eating crap, and watching hockey as befits spring's transition into summer in between. All this has left my brain precious few cells and even less time to get down the thoughts, interpretations and analysis of our crazy 2010 world into the form of semi-coherent postings on here. I confess I did start two postings about passing, flickering issues in the news, but I'm happy now that I didn't go through with publishing those, because a better idea has now finished gestating in my brain.


 

And that idea is well, well, well. I've appreciated all the feedback I've gotten over the past six months that I've been doing this. But I don't censor myself and my opinions can be, well, offensive. I'm sorry. But those well, well, wells are reserved for all those people who have to resort to calling me a marxist or a communist to discredit me, to all the Kevin O'Leary types out there who continue to complain about big government spending and expansion and high taxes while snapping their suspenders over the luck they had in the corporate world and investing. For the economist and the globe business section and the wall street journal and MSNBC, I ask you what you have to say for yourselves. You are all moribund dinosaurs.


 

Why? For all your credibility and expertise, you stopped discussions in economics in plain language some time ago. Now you use the same words, like small scraps of dirty toilet paper trying to wipe an infintesmally bigger pile of shit. I want you to know that many of us know that none of you know what the hell you're talking about, and you are fooling some of the people some of the time at best. You talk about recession and recovery and the stock market and the housing market like they're as predictable as the ocean's tides or a baby's first steps. Thus we hear things like "markets experience their biggest drop since the recession on fears of the euro's stability" and "canadian banks cut their mortgage rates just as they are starting to raise them amid fears that the volatile euro could erase the recovery." as if those sentences had tangible meanings or were confirmations of some predictable outcomes. Go on the news sites where you read these headlines. Read the reader comments and look at the resounding amounts of thumbs up. Quickly you realize a large, smug, complacent part of the population is still convinced that government encouraged real estate speculation will propel them to ever higher heights of prosperity. They are convinced that the G20 has it all under control and Japan and Greece's poor economic performances are due to mismanagement and cronyism. In a large part they are, but more on that later. I'm saying now they should watch bragging about the low rates they got and the people living in their basement. They are really convinced by the illusion that somebody has everything all under control.


 

Well, it's not. It's actually totally out of control, which is why it cannot continue. If a "market in fragile recovery" like this one means a guy like me has to mortgage his life away for half a million dollars for an old crumbling house in a decent location or a huge, shittily-built developer house in the middle of nowhere, we got problems. My other option is to sign off for a mere three hundred thousand and take a tiny, shittily-built developer shoebox in the sky that comes with annually escalating maintenance fees even after I've paid it off. Do you see what we've done here? Why are we playing this stupid game?


 

Because it's become the fashionable, à la mode status symbol. In Canada, people shamelessly suck on their parents' teat until they have enough money to buy a house, sacrificing life experience, thrills, indepedence and pride. I wouldn't be making judgements on people's life choices if they were motivated by something more than a hollow, misguided desire to get into an overpriced real estate casino game. No matter your age, it draws a sympathetic "It's ok, hang in there"-type of response at a party whereas when you say "I'm renting" it roughly equates to "I'm transmitting leprosy to you right now", moreso the older you get. After all, according to Macleans, our new national past time is real estate: talking about it incessantly, buying it, and becoming experts on it. Who needs internet porn when you've got MLS?


 

I've got myself all worked up here again and you're asking: "Why are you so angry?" I'm not. But I think many people seem take the current situation for granted and choose not to see the factors at work because they are hard to define and understand. Other situations have factors that are easier to find and blame them on. The Japanese economic situation can be partly attributed to the men, yes they were all definitely men, still are, who ran the country and alas, allowed levels of speculation as stupid as North America's to occur. The Greek one can be attributed to a collective lack of responsibility and restraint in its social policies especially and the fraud its politicians were committing by fudging its books and placing their state in the common European currency. (Here's a sidebar question for us plebians, though. Why does Greece drag Germany down but New Mexico doesn't drag New York down? Actually, we just think of NY as rich. The states of New York and California have both been bankrupt for almost two years. Why doesn't that affect America's currency?) The gulf oil spill can be attributed to British Petroleum. The decline in the quality of Pink Floyd's music coincides with the departure of Roger Waters. Do you see what I'm trying to get at? That is my question. Do you make the connections?


 

We humans, when something goes bad, are evolved to search for and recognize causes, factors, responsible parties and then use our moral compasses to assign blame, failure and consequences. A government has a leader who fires lousy ministers, and who himself gets turfed in elections if he fails. Corporations have wildly overpaid CEOs who take the fall from the board of directors and shareholders when they underperform. Of course, the politician is often kept in power just the same by an indifferent and/or ignorant electorate and the CEO still gets a golden handshake beyond what most of us will ever earn in our entire lives but that's beside the point. The point is that even these terribly flawed structures are accountable on some level. We have names, faces, and quotes that we can use our imagination on to get riled up over and turn against them with. It's called the court of public opinion.


 

Yet capitalism failed abysmally on a global scale not even two years ago, not just for the three billion people it fails daily but for everyone, even us rich country folks, and here we are again all back to chugging the same damn koolaid. We have heightened awareness, fearlessness, the new decade on our side but all we can come up with is the koolaid that our numbers can keep going up in the west, year after year, despite higher and higher levels of consumer indebtedness and consistent failure to produce anything of value. Ability to drink kool-aid comes from one thing: confidence. It's where the expression comes from: Jim Jones' followers though he was god so they had the confidence to drink the koolaid that literally killed them. But consumer confidence, a murky and opaque thing that is impossible at best to measure, is what our entire economy is based on. And it in turn is based on shareholder confidence. And shareholder confidence is now based entirely on governments promising to print money and back countries and banks, even bankrupt ones, into infinity. Barack, still like him but he's a pretty big koolaidholic too, trying to pass reform that's going to make it easier for the government to come to the aid of banks à la Henry Paulson 2008. No doubt he's got the 7000 banks on the FDIC insolvency watchlist in mind, lest they threaten the sacred "recovery" cow That's why our own Canadian government can give countries shit for "being too indebted" but warn them in the same breath not to "withdraw their stimulus" and "threaten the recovery". Recovery towards what? More and more bubbles which will require more and more public debt to restore confidence? Where will it end? That structure is ridiculous, it's unsustainable, and perhaps it's most frightening aspect is it has no names and faces to hold accountable. This makes it perfectly incomprehensible to each one of us, from the bum on the street to conspiracy theory reading basement pot smoker to esteemed economist on the TV panel. All of the government-sponsored (meaning, sponsored by us, everyone) "recovery" is now threatened by a group of nameless, faceless investors who decided because of the Hellenic state to pull their money and are waiting for another trillion dollars of public money to come through, this time from Brussels so they can continue to fabously enrich themselves, like Fabulous Fab at Goldman, from speculation.

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