Guest Post by Jim Kunstler
The economic picture manufactured by the national consensus trance has never been more out of touch with reality in my lifetime. And so the questions as to what anyone might do can hardly be addressed. How can I protect my savings? Who do I vote for? How do I think about where my country is going? Incoherence reigns, especially in the circles ruled by those who guard the status quo, which includes the failing legacy news media.
The Federal Reserve has morphed from being a faceless background institution of the most limited purpose to a claque of necromancers and astrologasters, led by one grand vizier, in full public view pretending to steer a gigantic economic vessel that has, in fact, lost its rudder and is drifting into a maelstrom.
For more than a year, the fate of the nation has hung on whether the Fed might raise their benchmark interest rate one quarter of a percent. They talk about it incessantly, and therefore the mob of financial market observers has to chatter about it incessantly, and the chatter itself has appeared to obviate the need for any actual action on the matter. The Fed gets to influence markets without ever having to do anything. And mostly it has worked to produce the false narrative of an advanced economy that is working splendidly well to the advantage of the common good.
This is all occurring against the background of a larger global network of economic relations that is quite clearly breaking apart. The rising tensions between the US, Russia, China, and the Euro Union grew out of monetary mischief “innovated” by our central bank, especially the shenanigans around debt monetization, which have created dangerous distortions in markets, trade, and perceptions of national interest. Nations are rattling sabers at one another and bluster is in the air. The world is bankrupt after thirty years of borrowing from the future to throw a party in the present, and the authorities can’t acknowledge that.
But they can provide the conditions for disguising it, especially in the statistical hall of mirrors that once-upon-a-time produced meaningful signals for the movement of capital. Instead of reality-based choices and decisions, the task at hand for the people in charge has been the ever more baroque elaboration of a Potemkin economic false-front, behind which lies a landscape of ruin scavenged by desperate racketeers. That this racketeering has moved so seamlessly into the once-sacred precincts of medicine and higher ed ought to inform us how desperate and perilous it has become.
The latest installment of the disinformation game was Friday’s employment release from the US Bureau of Labor Statistics. It was a “blockbuster,” implying blue skies everywhere from Montauk to Malibu. Except that no one with a remaining shred of critical faculty can be expected to believe it. 80 percent of the new jobs numbers were attributed to the mystical birth-death model, a pseudo-scientific fantasy of hypothetical new business starts and associated hypothetical new hires. Demographically, the most new jobs went to the over-55 age cohort — grocery baggers and Walmart greeters — and the fewest to men 25 to 54 (that bracket substantially lost jobs). The official unemployment rate fell to 5.0 rate, with no meaningful discussion of the huge numbers of discouraged people who have dropped out of the workforce.
But the perception of an economy on full throttle chug sent the stock indexes up. The Dow, the S & P and the NASDAQ are the only signaling mechanisms that the legacy media pays attention to, and the politicos take their cues from them, in a feedback loop of false information that begets more delusional positive psychology in those same markets. I suspect the sentiment that reigns now is about nothing more than getting through the holiday season without a financial accident.
But this Fed now finds itself in a trap of its own making. Having so interminably yapped about the interest rate hike, the central bank will have to put up or shut up in December. Only the year-final BLS employment figures might give them an out, if the numbers don’t look so phosphorescent. I think the truth is, this phony baloney economy can’t withstand even a measly quarter-point benchmark interest rate hike. For one thing, it would blow up the operating models of Fannie Mae and Freddie Mac, the buyers of home mortgages who are keeping the construction industry on life support, as well as the parallel rackets in securitized auto and student loans. Imagine all the derivatives bets that would go south. In reality, the Fed knows that it will have to shovel more ZIRP money into the debt-saturated maw of a dying financial leviathan. It can do that, of course, and probably will in the coming winter of 2016, but when that time comes, it will have absolutely no credibility left. And the leviathan will be a little closer to heaving up dead on the beach.
The third World Made By Hand novel
!! Is available !!
(The Fourth and final is finished and on the way — June 2016)
“Kunstler skewers everything from kitsch to greed, prejudice, bloodshed, and brainwashing in this wily, funny, rip-roaring, and profoundly provocative page- turner, leaving no doubt that the prescriptive yet devilishly satiric A World Made by Hand series will continue.” — Booklist
My local indie booksellers… Battenkill Books (Autographed by the Author) … or Northshire Books…
or Amazon…
Cuntsler, a libtard Dem who voted for Oreo twice ….. fuckin’ hilarious to hear him complain.
But, I might have to buy his novel “World Made By Hand Job”
Ya stucky, he is that. And as much as I hate to admit it, that’s always in the back of my mind when I read anything he writes, which is a shame because I often like his style. As for his questions, “who should you vote for and how can you protect your money” well, you shouldn’t vote for any of these fascist clowns currently running, and you should buy tangible assets and/or productive land. Gold is on sale right now….
Greetings,
I like Kunstler for his views on modern urban architecture. He is correct in that our living spaces define us and that our communities should be made to bring people together and not just for cars.
If you have not seen this then I’d recommend that you do. It is one of my favorites.
Despite Kunstler’s arguments, I’m not sure there is a “common good”, it sounds too much like “social justice”, and can probably be argued into any shape, form or concept that the speaker is in favor of.
The “common good” is probably just another unicorn, sounds nice but unlocateable in the real world. Once someone found it expedient to build a building; they had their aesthetics, needs and finances in order and built it. Someone similarly inspired and capable built next door; the block filled out over time, then the next block, and so on. Avoiding the ravine limited the eastward expansion of the block, while avoiding the cliff set the north side, and so on. The cities grew organically, burnt down a time or two, were rebuilt with better separation and materials, and so on. Some lessons were learned over centuries, and others repudiated when disease and disaster hit.
I doubt any one person who built a building did it because “the common good” required it. They built it because they needed somewhere to live, house their business and serve / protect their customers from the rain. The “common good” is a much later concept, and sounds profound while conveying little. It also has Soviet overtones, as in “your death is required for the common good, you kulak!”.