JAPAN’S “LOST DECADE” VERSUS THE ETHICAL COLLAPSE OF THE USA.
Biofeedback loops between Internet authors: an ecosystem of the mind. Paul Krugman quotes Adam Posen:
“What the Obama team is proposing is disconcertingly similar to the actions of Japanese Prime Ministers Hashimoti, Obuchi, and Mori in 1995 and 1998: Rather than ask the legislature for straightforward recapitalization money, you have the political leadership preferring to risk overpaying current owners of toxic assets rather than forcing sales. For all of Japan’s supposed intervention in markets, its government still lacked the stomach for taking over banks, let alone closing them.”
And Krugman to add: “To be fair: the Obama team really does face huge political obstacles in doing the right thing. Maybe it really can’t be done; as Rahm Emanuel said about me, “[unprintable].”
Krugman concludes: “But we shouldn’t kid ourselves. Japan is us.”
Well, that is all too generous. President Obama himself has evoked Japan’s “Lost Decade”, to justify doing nothing drastic, like firing the influence peddlers and financial scam artists in tight orbit around him (details below).
True, as I pointed out before, though, and as Krugman reminds us, it is politically dangerous for Obama to do the right thing before he has done the wrong thing for all to see. Obama needs to have the average US citizens come to the conclusion that a lot of what they learned from kindergarten on is wrong, in all sorts of ways.
For example, US citizens, to their dismay, will have to learn that: France is economically smarter, than the USA, however shocking and counterintuitive that may be, and the economic policy of the USA of spending 18% GDP in borrowed funds is “the road to hell” as the European Union president just observed.
All the more the road to hell, if one sees that a lot of the spending of money Obama does not have, is all about sending money to his hedge fund friends. Hedge funds are those contraptions reserved to multi millionaires that are trying to bury mankind; reminder: AIG was a hedge fund, plotting with other hedge funds; that it called itself an “insurance” company is irrelevant; as even Americans now know, all AIG insured were bonuses.
Most famous Americans are rich, thus in hedge funds, so they all support hedge funds. In particular opinion makers are mostly pro-hedge funds, because they are pro-themselves. They grandly call that machinery to make the rich, namely themselves, richer, “Anglo-Saxon” capitalism, in a ploy to sound patriotic. But it’s all a scam.
Summers, the chief economic adviser of Obama, instead of saying absurdities, such as claiming that he does not know any economist that favors temporary nationalizations of the banks, should be teaching the right economics to the People. But how could he? He set up the death machine that devoured the world. And he personally profited from it: he was employed by the hedge fund “Shaw”, for years. Guess who is first on line for getting a trillion dollars from the Obama team? Well, hedge fund Shaw. Next guess: where could Summers go to after Obama finally fires him? OK, hedge fund Shaw. Just a guess. If that is not ethical collapse, I don’t know what is.
Just as myself, Obama was a small child at school in a rather primitive country. In such countries one is continually confronted with natives with ironclad certainties, offering completely different perspectives on nearly everything. Obama knows well how wrong the indigenous population can be, while being very sure of itself.
So now Obama is confronting the American natives, and the natives, as usual with natives, know it all. Obama has got to know the Americans are wrong, but he cannot just tell them that, because, differently from the present author, he has to remain popular to be effective. Obama knows that locals do not take kindly to be told they are idiots, and then they dig their heels. The way out for Obama is to explore the errors first, and then suggest alternatives to the mentally challenged masses. As far as making errors, Obama is equipped with the best and brightest team that ever was. Even more than Bush, Summers and his ilk have constructed the machine that devoured America.
The machine which devoured America: the giant financial conspiracy which gulped down all of the world’s credit to pay itself fortunes in bonuses, and own as much of the world as it could.
Devoured by the few rich, materially ravenous, and morally ugly does not happen just with banking. Many other sectors of the economy of the USA are gravely affected. Health, Insurance, Credit ratings, Media, etc.
Health insurance and the health industry of the USA has also grabbed all the money for itself. Including president Obama’s “friend”, the legendary Warren Buffet, who made a fortune with health insurance and credit rating agencies (Health insurance devours American lives, and fraudulent credit ratings are at the root of enabling the financial crisis by lying about the ratings of the likes of Citigroup or AIG, Buffet clients all). But, in the USA people love money and people with money unabashedly. The more billions, the more friends you have.
Japan’s “lost decade” was bad, and Japan has not come out of it fully. [But there are also larger issues in Japan, such as the lack of immigration, the aging of the population, and the proverbial insular culture.]
Contrarily to legend, in Japan, the real GDP per person went up during the “lost decade”. In the USA, the real GDP per person went down for a full decade prior to the economy tipping out of control in the last six months. That is why I call this slump made in the USA, a depression, not a recession. It will soon have lasted longer than the Great Depression of the 1930s.
So “Japan is us” is too rosy a comparison for the USA. Japan has a distinct oligarchy, but it has stayed away from outright plutocracy since W.W.II. Financial rewards at the top have been kept reasonable, all along. Japan remembered that its oligarchy led mankind to disaster by attacking Korea, China, French Indochina, and finally the USA and South East Asia, during W.W.II. Just in China, the Japanese invasion killed twenty-million people. Ever since, Japan, sobered by radiation therapy, has kept tight reins on its plutocracy. Japan understood that plutocracy had everything to do with its ethical collapse.
The French “oligarchie” (14th century) comes from the Greek oligarkhia “government by the few”, from oligoi “few, small, little” and arkhein “to rule”. Plutocracy means that it is the wealthy, and the underground, that rules. This is the case in Banana Republics, and, now, in the USA. The Federal government has sent enormous flows of money to the wealthiest people in the world in the last few months, and a lot of it was hidden, underground [in particular AIG was used that way, as a conduit for secret money flows, in full connivance with bank holding companies, hedge funds, and the like].
Sending trillions of dollars to the corrupt hedge funds-bank holding companies complex, “without keeping track” while millions of US citizens are threatened with foreclosure out of their homes, and the Obama administration stresses out about a few dozen billions for the car industry, is par for the course.
How does one get rid of a plutocracy when it’s firmly in control of the state? Well, revolution. Or then one elects someone one could hope was out of the system: Obama. So, as the world magazine, “The Economist” ordered Obama in its latest lead editorial: “lead, damn it”.
Instead the young chief of staff, “three seconds away from the president”, got 16.2 million dollars in two years from a bank. Rahm Emanuel was not qualified for that position, except as a lobbyist. Among ethical people, we call that a bribe from the bank holding companies, so that, when the guy is chief of staff, trillions can be sent to bank holding companies, while claiming disingenuously that the USA is the only country that ever was, which does not know how to temporarily nationalize banks.
And guess what? This is exactly was has been happening. As long as this sort of enormity is not fixed, the fact that completely corrupt people hold the levers of power, the economy of the USA will not be fixed.
The economy has been so bad, for so long, that, below the veneer of plutocratic prosperity, American society has very serious troubles. The USA is the top narco state in the world (as far as consumption is concerned: maybe, because of the plutocracy, drugs are the only way to get high?). The USA has also the highest incarceration rate in the world.
Geithner on ABC news this weekend, clear eye and bushy tail, claimed ludicrously that he “always worked in public service”. Either he deliberately lied, or he has lost track of reality. Many of those guys have such a wrapped notion of reality that, when they work for a “consultancy” such as “Kissinger and Associates”, as Geithner did, for several years, they envision themselves as in public service. It’s that bad.
Conclusion: There will be a bad society and a bad economy, as long as Obama is too friendly to the self described “best and brightest”, the richest, most obscene and most lying, “three second away”. The incapacity to see this, and of being outraged by it, is directly related to economic misperceptions, such as believing that the USA’s politics towards its giant banks is different from Japan’s erroneous one.