FOR A FEW DOLLARS MORE – PART ONE

Where life had no value, death, sometimes, had its price. That is why the bounty killers appeared. For a Few Dollars More

 

“Tell me, isn’t a sheriff supposed to be courageous, loyal and, above all, honest?” – Man with No Name – For a Few Dollars More

Whenever I get an idea for an article I plan to keep it short and sweet. But it never seems to work out that way. Once I start typing, the articles tend to grow exponentially. It happened again with my attempt to make sense of how the United States of America managed to screw our finances up so badly, that an epic collapse is within view to people with their eyes open to facts and the truth. You don’t end up in the predicament we find ourselves in today due to a couple minor mistakes over a short time frame. It took thousands of horrible choices, colossal doses of delusion, a heaping of stupidity, and a mountain of denial over decades to put us on the brink of economic collapse. An unholy amalgamation of demographics, fiat currency, debt, taxes, power and greed have led us to this point. Next we experience collapse, revolution and ultimately, retribution.

Since I’ve identified four major rationales for our impending doom, I’ve decided to write a four part series that can be read in small doses, rather than one enormous article. I don’t want anyone to miss tonight’s episode of Dancing With the Stars, get distracted from the Royal Wedding preparations, or skip the best reality TV show ever – Ben Bernanke’s press conference, while reading an 8,000 word article about the end of America. The four part series will have a Clint Eastwood theme. For a Few Dollars More will address the Baby Boomer impact on America’s decline. A Fistful of Dollars will examine how the creation of the Federal Reserve and the income tax in 1913 set us on a path to ruin. Outlaw Josey Wales will scrutinize the looting of America by a small group of powerful, connected, super rich men lurking in the shadows, but pulling the strings on our puppet politicians. Lastly, Unforgiven  will detail the impending collapse of our economic system and the retribution that will be handed out to the guilty.

Over the last few weeks there seems to be consensus among many financial bloggers, whose credibility is far more trustworthy than the corporate mainstream media, that the country is teetering on the verge of economic collapse due to the complete capture of the government, financial, regulatory, and media by a small group of oligarchs. They have also been described as the super rich, plutarchs, ruling elite, and scum sucking leeches. The bloggers that I have the utmost respect for, including Jesse, Charles Hugh Smith, Mike Shedlock, Yves Smith and Gonzalo Lira have all come to the logical conclusion the horrific economic situation of the country is a direct result of the greed, corruption, fraud, and plundering by a powerful connected group of rich financiers operating without fear of being brought to justice by the authorities.

While pondering the ruminations of these dedicated truth tellers, I was reminded of the Clint Eastwood Spaghetti Western For a Few Dollars More. The quotes above are representative of living in the USA today. There are supposed to be courageous, loyal and honest sheriffs that protect the citizens from crime, corruption and evil doers. But, just as we saw in the Old West of Clint Eastwood movies, the sheriffs are always corrupt and bought off by the evil cattle barons. In a world where life has no value and you can’t rely on law enforcement to protect your interests, the citizens eventually will need to turn to bounty hunters to take care of the bad guys. The bounty hunters of truth reside on the internet. They reside at Zero Hedge, Jesse’s Café Americain, Of Two Minds, Mish, Chris Martenson, and dozens of other anarchist websites. When you can’t trust your government, your bankers, your church, your media, or mega-corporate CEOs, you need to seek the truth where it can be found. The insightful bloggers who courageously print the truth on a daily basis have unanimously concluded that a small band of powerful elite have accumulated undue influence and control over this country, having brought it to the verge of economic collapse. How did this happen? Who is responsible? Why were they permitted to gain this power?

Boomers Come of Age

“If those in charge of our society – politicians, corporate executives, and owners of press and television – can dominate our ideas, they will be secure in their power. They will not need soldiers patrolling the streets. We will control ourselves.” – Howard Zinn

Whenever I direct any blame for our economic woes towards the Baby Boom generation they react as expected. They blame the GI Generation for creating the welfare state. They declare that Generation X and the Millenials are just as greedy and self centered as the Boomers. Boomers are great at blaming, ridiculing and acting pompously, while taking no responsibility for their actions and more importantly their inaction. This generation cannot avoid their responsibility for the state of affairs. They like to take credit for their stand against the Vietnam War and their protests against the man during the 1960s. They don’t like to take credit for turning into materialistic, greedy, selfish, short-term focused bastards. When a generation of 76 million people decides to go in a particular direction, the country will go in that direction. While blaming FDR and the GIs who stormed the beaches of Normandy for creating the unfunded Social Security and Medicare liabilities, the Boomers have been voting since the mid-1960s and have been in control of corporate America and the levers of government since the early 1980s.

The U.S. Congress is dominated by Baby Boomers today and has been dominated by this generation since the 1990s. The Senate has 60 Boomers out of 100, while the House of Representatives has 254 Boomers out of 435 members. Boomers occupied the White House from 1992 through 2008. They have had the political power and control of the agenda for two decades and have failed miserably. Rather than do what was best for the country for the long-term, they took the expedient, easy, vote getting route. Promise more than you could ever deliver and let future generations worry about the consequences. Not one true noble statesman has arisen from this generation of myopic, self centered “Me Generation” political hacks. Even as the country nears the precipice, they continue to address the great issues of the day with talking points supplied by other Baby Boomer PR maggots from Park Avenue. These weasels care not for the country, but worry only about poll numbers and the next election cycle. An apathetic public, dominated by the Baby Boom generation, has the attention span of a gnat. As long as they can make the lease payment on their Escalade, use one of their 15 credit cards at the Mall, be entertained by 600 cable TV stations, play with the latest iSomething, live in their McMansion for two years without making a mortgage payment and consume massive quantities of fast food, then any thoughts of future generations or civic duty are unnecessary. Live for today has been the rallying cry for the Boomer generation. Pot was their drug during the 1960s. Debt has been their drug since 1980.

The drug (debt) dealer for the Baby Boom generation has been the Wall Street mega-banks, coincidentally, run by Boomers. The entire corrupt financial industry is being run by Boomers. The CEOs, CFOs, and the thousands of Harvard MBA VPs that created the fraudulent derivative scheme to bilk billions from clueless municipalities, pension funds and American taxpayers are all Boomers. It is no coincidence that the great debt delusion began in the early 1980’s. Jim Kunstler captured the essence of Boomer transformation:

“The Baby Boomers came back from the land, clipped their pony tails, discovered venture capital, real estate investment trusts, securitization of “consumer” debt, and the Hamptons. Greed was good.”

The Boomer CEO hall of scam has been built on the brilliance and financial acumen of Lloyd (god’s work) Blankfein, Charlie (keep dancing) Prince, Jamie (friend of Obama) Dimon, and the king of the Boomers, Hank (the system is sound) Paulson. These mainstays of crony capitalism led the Boomer charge of greed, greed and more greed. The Baby Boomer generation has been the proverbial pig in a python working its way through the decades as presented below. By 1985, Boomers had entered the work force in full force with the entire generation between the ages of 25 and 42. It will be a great day when the python craps this pig of a generation out the other end.

It is not a coincidence the National Debt growth has far outstripped GDP growth since 1980. Boomers had been spoiled their whole lives and felt they deserved the goodies today while passing the bill to future generations. They voted for politicians who promised them more benefits, more programs, more subsidies, more tax breaks, more military adventures, and more pleasure. And this was “paid for” with more debt. Thirty five years of government debt declining as a percentage of GDP was reversed over the next thirty years starting in 1980, pushing it past the 90% tipping point in the last year. The country is over-indebted to the tune of $9 trillion on a current basis and $100 trillion on a long term accrual basis.

There is no better picture of Boomer decadence and myopia than an historical view of the national savings rate. The parents of the Boomers understood the meaning of sacrifice and investing in the future of the country. During World War II they bought US War Bonds to support the cause. From 1950 through 1985, the savings rate consistently ranged between 7% and 12%. Americans had this odd notion that if you saved more than you spent, you actually got ahead in life. Excess savings were used to invest in new plants and equipment that were used to produce goods and employ more Americans. By 1985, the Boomers considered these notions as quaint and old fashioned. The savings rate methodically declined until it went negative in 2006, just prior to the worldwide financial conflagration. Our inspirational Boomer president George (Mission Accomplished) Bush while waging two wars of choice, asked for the ultimate sacrifice from the Boomers. He solemnly urged them to buy a GM SUV with $0 down and 0% interest for 7 years, so we could defeat the terrorists. The Boomers who ran GMAC were more than happy to make loans to people with no income so they could “purchase” a $40,000 ostentatious gas guzzling hog. They were doing their patriotic duty for the good of the nation. It brings a tear to my eye just thinking about it.

The Boomers not only heeded George’s call, but they did him proud by buying 8,000 sq ft McMansions with $0 down and negative amortization ARMs. Luckily, the executives at the mortgage origination sweatshops were Boomers. They found no good reason to verify income or assets before loaning someone $600,000, because they knew their fellow Boomers at the rating agencies would rate the bundles of these toxic shit loans as AAA so the Boomers on Wall Street could sell them to greater fools. GMAC’s exemplary subprime mortgage arm – Ditech, did a bang up job getting migrant Mexican workers into $450,000 homes in California’s inland empire. As the tsunami of bad debt swept toward shore, delusional Boomers across the land borrowed $500 billion against the inflated value of their McMansions and installed granite counter tops, stainless steel appliances, home theatres, elegant patios, Olympic sized pools, and with the excess home equity, leased a BMW or two. The first devastating tsunami wave hit in 2008 and wiped out billions in faux Boomer wealth. Instead of learning a brutal lesson and reverting back to saving and frugality, the “never say sacrifice” Boomers ventured out to where the waves had subsided looking for more trinkets and treasures.

Tsunami Warning by Mobile Phone

The next tsunami wave is on its way. The delusional Boomers will be surprised again.

The Boomer persona has been formed over the last five decades and the country will deal with the consequences for decades to come. The clean cut Beaver Cleaver children of the 1950s turned into the pot smoking Dobie Gillis of the 1960’s, then into the slimy Gordon Gekkos of the 1980s and ultimately into the eternal wealth seeking Gollums of today.

 

  

This Boomer debt orgy over the last thirty years would have made Caligula blush. Of course, none of this could have happened without the Creature from Jekyll Island. I will address this aspect of our fate in Fistful of Dollars – Part Two.

Now for the righteous indignation from the Boomers that think I have unfairly lumped them all together as one. Their reactions are predictable. Even though they have had the means, the power and the time to reverse the course of USS Titanic, they plowed full steam ahead into the abyss. The GI Generation is dead. Generation X doesn’t hold the reins of power. The Boomer generation needs to look in the mirror to recognize who is to blame.  I’m sure there are a few good Boomers out there somewhere, but as a generation they have failed this country and our unborn generations miserably.

MILLENIALS GET IT

As I perused my local paper this morning I glanced at the story about the North Penn graduation yesterday. Approximately 1,200 Millenials graduated and are moving on to their next step in life. I was about to skip to the next story when I saw the name Neil Howe in the story. The valedictorian’s speech to his class referenced our current Crisis as laid out by Strauss & Howe in The Fourth Turning. This 18 year old kid gets it. He understands these are dangerous times. He told his fellow classmates they are the new Hero Generation, as he referenced the last Hero Generation that did the heavy lifting and dying during the last Fourth Turning.

I know the old farts on this site do the usual bashing of the youth of today, but they are wrong. This country will only get through this Fourth Turning with a positive result if the Millenials are successful in handling the terrible ordeals that await them. I have three Millenials at home. I know their friends. These are good kids. Their eyes are open. They see how badly their elders have fucked things up. They have no choice but to fix it. They have no choice but to meet the immense challenges ahead. While the Boomers scream at each other and threaten to shut down the government and issue more debt to paper over a debt crisis, the Millenials are preparing for the next 15 years. They are faced with modern distractions (iPods, computers, TV, social media), but human nature does not change. They have not been properly educated by the Boomer run education system, but they understand crushing debt, no jobs, stagnant income, and rising food and energy costs. They know the country cannot run $1.5 trillion deficits for infinity without destroying the country. They are our last best hope.

We’ve been here before. The GI Generation has virtually died off, but the new Hero Generation is getting ready to step up. The old fogies who shit on this generation need to step back and understand history. This generation will step up, because they have to.

North Penn grads hailed as next greatest generation

By Linda Stein
Staff Writer

North Penn High School seniors celebrate as they take the fieldfor the Fifty-Sixth Commencement ceremony at the school on Wednesday evening June 15,2011. Photo by Mark C Psoras

TOWAMENCIN — A sea of newly minted North Penn High School graduates in blue caps and gowns marched into Crawford Stadium Wednesday under a softer blue sky.

Cheering and applauding family and friends clutched balloons and flowers. Some took pictures. Others smiled, waved and blew kisses as the 2011 graduates–more than one thousand strong–took their places on the field, ready to begin a new stage in their young lives.

In an inspiring speech, class Valedictorian Julian Pei spoke of the challenges that his generation faces with economic uncertainties and war abroad.

“Sometimes it feels as if our country is unraveling,” Pei said. “But we cannot fear these times, rather, we must embrace them. The word ‘crisis’ in Chinese is made up of two parts. The first character means ‘danger.’ Clearly we are facing some uncertain and possibly dangerous times ahead. But the second character means ‘opportunity.’

“I believe our generation faces some enormous opportunities in the face of crisis,” he said. Citing historians William Strauss and Neil Howe, Pei said that American history has 80 to 100 year cycles.

Current circumstances comprise a moment of crisis but “we are the ‘Hero Generation,’ mirroring the ‘Greatest Generation’ from about 80 years ago.

“In order for us to properly seize life’s opportunities and become unbeatable…we must be prepared to take on any challenge,” Pei said.

“Go out into the world knowing that the time is now to take the fist step in sculpting a new generation.”

Pei, who plans to go to the University of Pennsylvania, will study biology and finance.

The Lifecycle of the HERO Archetype

 
 
 
We remember Heroes best for their collective coming-of-age triumphs (Glorious Revolution, Yorktown, D-Day) and for their hubristic elder achievements (the Peace of Utrecht and slave codes, the Louisiana Purchase and steamboats, the Apollo moon launches and interstate highways).  Increasingly protected as children, they become increasingly indulgent as parents.  Their principal endowment activities are in the domain of community, affluence, and technology.  Their best-known leaders include: Gurdon Saltonstall and “King” Carter; Thomas Jefferson and James Madison; John Kennedy and Ronald Reagan.  They have been vigorous and rational institution builders.  All have been aggressive advocates of economic prosperity and public optimism in midlife; and all have maintained a reputation for civic energy and competence even deep into old age.A lifecycle outline:

  • As HEROES replace Nomads in childhood during an Unraveling, they are nurtured with increasing protection by pessimistic adults in an insecure environment.
     
  • As teamworking HEROES replace Nomads in young adulthood during a Crisis, they challenge the political failure of elder-led crusades, fueling a society-wide secular crisis.
     
  • As powerful HEROES replace Nomads in midlife during a High, they establish an upbeat, constructive ethic of social discipline.
     
  • As expansive HEROES replace Nomads in elderhood during an Awakening, they orchestrate ever-grander secular constructions, setting the stage for the spiritual goals of the young.

The G.I. Generation (Hero, born 1901-1924) developed a special and “good kid” reputation as the beneficiaries of new playgrounds, scouting clubs, vitamins, and child-labor restrictions.  They came of age with the sharpest rise in schooling ever recorded.  As young adults, their uniformed corps patiently endured depression and heroically conquered foreign enemies.  In a midlife subsidized by the G.I. Bill, they built gleaming suburbs, invented miracle vaccines, plugged “missile gaps,” and launched moon rockets.  Their unprecedented grip on the Presidency began with a New Frontier, a Great Society, and Model Cities, but wore down through Vietnam, Watergate, deficits, and problems with “the vision thing.”  As “senior citizens,” they safeguarded their own “entitlements” but had little influence over culture and values. 

The Millennial Generation (Hero?, born 1982-?) first arrived when “Babies on Board” signs appeared.  As abortion and divorce rates ebbed, the popular culture began stigmatizing hands-off parental styles and recasting babies as special.  Child abuse and child safety became hot topics, while books teaching virtues and values became best-sellers.  Today, politicians define adult issues (from tax cuts to deficits) in terms of their effects on children.  Hollywood is replacing cinematic child devils with child angels, and cable TV and the internet are cordoning off “child-friendly” havens.  While educators speak of “standards” and “cooperative learning,” school uniforms are surging in popularity.