The Abyss Stares Back

   As the political conventions descend like the soggy forces of nature they have become -- the tropical depressions of politics -- the Republican party will be seen, with growing clarity, as the party that wrecked America. So many shoes are about to drop, and so many dominoes lined up to fall 'out there' on the financial landscape that the thump and clatter of crashing institutions will sound like the percussion section of the renowned USC marching band as the nation tramps toward the general election.
     In a classic calm-before-the-storm moment, last week's momentous Jackson Hole monetary conference played out like Sherlock Holmes's "dog that didn't bark in the night." The poobahs of global banking turned out in the Grand Tetons to compare Gulfstream jets and show off their concho belts, and that was about it. For all the massive turmoil in the banking system, almost no real news leaked out of the conference, and one was inclined to come to the unsettling conclusion that nothing came out because absolutely nothing happened there -- because absolutely nothing can be done about the gathering calamity of capital.
     At the moment, two of the biggest elephants in the room, so to speak, are going tits-up with X's where their eyes used to be. These would be the "affordable housing" enablers Fannie and Freddie, who managed during the past decade to make housing virtually unaffordable for any normal, responsible person unwilling to game the system -- with the additional consequence that not only the housing market but the general credit-and-lending apparatus of the US has entered a state of morbid failure. These two corporations are now dead, incurring a legacy of obligation that will add five trillion dollars to the national debt at one stroke. Nobody knows what the exact results of this debacle may be -- and the current silence about it is deafening -- but odds are the effect will range somewhere between destroying the currency and bankrupting the United States altogether.
      Meanwhile, the list of giant banks on life support runs to at least ten, with an unknown number of less giant banks that will be squashed when the big ones go down. The sound you hear in the background -- even beyond the sound of John McCain's carping, snotty campaign commercials -- is the whoosh of capital leaving the system. By capital I mean assumed accumulated wealth ready to be put-to-work by this society. We won't have any. The president-elect will wake up November 5th as leader of a poor nation, and all the grand plans laid out during the campaign will have to take a back seat to a severe revision of hopes and expectations.
     Now the Democratic party has assembled in Denver to anoint its candidate. The big question for me is whether this will occur in a dignified manner, or whether Hillary Clinton's supporters will turn this into yet another fiasco-du-jour. Forgive me as I begin to wonder what's up. Mr. Obama has graciously yielded to the Florida and Michigan delegations that their morally-compromised primary votes be allowed to count. And Obama has yielded to the ceremony of placing Mrs. Clinton's name in nomination. And a flock of disgruntled harpies has landed in Denver to advance Mrs. Clinton's claims at all costs -- and, well, I fear that there may be some room for mischief here, like an arrant hijacking of the convention by the forces of Hillary.
     This would be an almost unbelievable debacle, and yet we are in a season of debacles so anything can happen, really. I am generally allergic to paranoia, but Hillary's recent going-through-the-motions lip service to the Obama campaign does not convince me that she is truly on-board. Rather, I think she is egotistical enough -- in the Greek tragedy sense -- to just kick back now in her Denver hotel suite and see whether her troops can seize the arithmetic of the convention and jam her down the party's throat. I know this sounds like a paranoid fantasy, and I offer it up as little more than that, but, there you have it, like so much brisket on the butcher block....
      Meanwhile, reports coming out of Denver that Hillary's Harpies say they would rather vote for John McCain than Barack Obama simply boggle the mind. How fucking crazy are these women? And what have they made of their movement to advance political equality -- a mere campaign of revenge? Is that what their country needs right now?
     Speaking of John McCain, my friends, we can return to the general theme of this essay, which is that his party will come to be regarded as the party that wrecked America, and therefore, despite the poll numbers zinging around the news-o-sphere lately, he really doesn't have snowball's chance in hell of winning this election -- assuming it will go ahead as a contest between himself and Obama. Returning also to the theme of impotence among the leaders in the finance sector -- Mr. Bernanke, Mr. Paulson, et al, as displayed in Jackson Hole -- I'm rather convinced that the carnage on the money scene will be so extreme this fall that the nation will seem to have been transformed from a superpower to a basketcase before November 4th, and that the blame for this state of affairs will be blindingly obvious: the people in charge for the past eight years looted the treasury, destroyed the currency, and left the machinery of capital a smoking wreckage.
     And so, with the fucking nonsense of the Beijing olympics being over, let the real games begin.
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My new novel of the post-oil future, World Made By Hand, is available at all booksellers.

Comments

[Tangurena]

While the republicans are indeed the "party that wrecked America," they have done an extremely effective campaign to blame it all on the Democrats.

I'm waiting to see just how badly hillary (and her supporters) betray the Democrats here in Denver. Yep, this will be one "interesting" week.

[steve duncan]

Republicans wrecked the economy? Nah, won't go down like that. The nation will act like the guy that bounces a check and is too embarrassed to admit he screwed up and lost track of his finances. It's the banks fault, didn't they tell me I had overdraft protection? No? Hmmm, I swear they did........OK, payroll was late depositing my wages. No? They were done like always? Hmmmmm.......The damn wife forgot to list a check? Damn, they're all accounted for.....Well, somebody fucked up, and it wasn't me. Must have been the Democrats. Goddamned tax-and-spend, homo loving, baby killing, tree hugging, terrorist supporting, nigger kissing commies, if it wasn't for them I'd have had the money to cover that check, it's all their fault! You think the same electorate that sent two successive Republican administrations to DC is going to own up to the damage done? Ha! When the dust settles it will all be the fault of Democrats. It's all been downhill since Clinton's blow job, right?

[javaman8263]

The second hour of the racheal maddow radio show this past friday, she had some people call in. One woman was a bat shit crazy "I'm not voting because hillary isn't #1" nut job. However she margined her argument around the case that she won't vote for Obama because as she said, "I just don't trust him". And mclame is the one to trust???

Her focus was on abortion rights. mclame who as came out publically stated that he will appoint supreme court justices that will overturn roe v. wade and Obama has been a long time supporter of a womans right of choice and will continue to do so.

maddown clearly stated that by not voting, it was a vote for mclame, the caller would have none of this and after a time, it became clear that it had nothing to do with "trust" in Obama but more of the clear fact that Obama wasn't hillary.

There are scores of these nuts out there and if they upset the convention with their antics and squash the Democratic parties chances in November, I have no problem with doing what the French did with the nazi colaborators during WWII; shave their heads and paint a swastica on them.

These crazy as salt on a snail nuts need to get their priorities straight and stop playing this "it's not fair and I'm taking my blocks and going home" type of BS.

(pardon the poor spelling and grammar, I'm ranting) Cheers!

[EearlK]

Pity whosoever is elected this cycle, because they will have no chance. Hill should keep her powder dry and hope for better next time. But that supposes a next time, and '12 is looking like the year of the beast in terms of oil supply. The Maya calendar ends in '12, so there is also the end-of-the-world to deal with.

Jimmy, did you not hear all the harrumphing out of Jackson Hole about Buiter's paper saying the Fed is Wall Street's bitch? I think that should at least count as local color, if not news. And that snappy 'little dutch-boy' comeback was soooo, oh dare I say it, BITCHY!!!!

Gotta run, shorts are hot today!

[mason-dixon]

What a bunch of Obama-worshipping morons Kunstler and his admirers are at this site. Yeah, Obama is gonna change things for the better. With the usual hacks like Bzerzinski and Rubin running the show. Oh, sure.

[mason-dixon]

OK, on second thought I was wrong to call Kunstler a moron. He is a smart guy. But his great fondness for Obama is just senseless.

[mlytle]

Obama has a bit too much socialism in his veins and yes, he is a globalist, as he has hired Berserk-ski. However, he has occasional flashes of realism, and being that we havn't had that for years in the White House, that allows for dribbles of hope...

[FARfetched]

"Let the real games begin" - yup. I had the same thought yesterday evening. It may be that the Beijing Olympics will be unique in that, rather than being the coming-out party for a city or nation, it will signal the beginning of China's decline of relevance to the West. With shipping costs already driving the manufacture of large/heavy/bulky items back to the US and other countries of origin, expect the trend to work down the size chain as the temporary reversal in fuel prices ends.

As for politics, we're screwed and it doesn't matter who wins in November. The goplets have wrecked America, and the country will continue to come down around our ears. The difference is that Obama might be able to spread the pain over a wider income range, while McSame will simply bail out his ultra-rich base and leave the rest of us to twist in the wind. And blame it on liberals, blacks, Muslims, or whatever other group is handy.

[FARfetched]

BTW, the latest episode of FAR Future is up:

http://farmanor.blogspot.com/2008/08/far-future-episode-48-talks.html

[DanaJ]

I have to agree with Steve: The Repugnican credo is to never admit mistakes, no matter how egregious, and to lay the blame on the dumocrats, whom oddly, never seem to object.
I still think that Obama should not take this to a personal level of attack against McSame, which is exactly what the repugs want, its their game.
He needs to attack on the policy level and lay the blame on the republican policies that got us here. If he does this, and McSame keeps up the personal attacks, Obama will win as people will see that McS has nothing to offer except more of the Same ol thing.

M-D: I don't see Jim as being an Obama lover, obviously you are a first time reader. But seriously, 4 more years of McSame? This country will really be at the bottom of the outhouse pit.
Don't forget, gas was just a buck a gallon when Shrub took office, its $4 now. Are you better off today? Well, maybe if your an investment banker you are.

[mason-dixon]

Sorry, mlytle, but the lesser of two evils is still evil.

[Moondog]

Although I ardently agree with Jim, the "people" in charge for the past eight years will find a way to prop us this pathetic house of cards until after the election. They will try to assure Duhmericans that everything will be all right: energy supply and prices will be just fine, the financial system will adjust and right itself, and it's Reagan's "Morning in America" time again. Let's see just how much longer the delusion can persist, like the Knight in The Holy Grail, a dismemembered torso profusely spewing blood while insisting, "It's just a flesh wound."

[montysano]

@ mason-dixon: I don't think there are many "Obama worshippers" around CFN. Obama is the choice we've been given, no more and no less. What's your plan, genius? Stay home on 11/4? Vote 3rd party? Maybe BO will make some significant changes or...... maybe he'll change nothing. Whatever the case, I'll pull the lever for him and hope for the best. What's the alternative? I'm not ready to roll over and give up yet.

[ChrisM]

Hi Jim and everyone.

I'm the author of the Crash Course and I just wanted to let everyone know that the latest chapter on Peak Oil is up.

http://chrismartenson.com/peak_oil

If ever there was a tapestry against which BOTH political parties look like utter fools, this would be it.

The Chapter is a flash video, 18 minutes long, and geared to speak to as broad an audience as possible.

I hope you find it useful and worthy of spreading to family and friend alike.

All the best,
Chris

[annie]

Your money sense is right on. The house fiasco and the credit crunch were not difficult to see coming and anyone who think we are in a better lit part of the forest and heading for open field is dreaming.

I must take issue with the Hillary assessment. Harpies? Why not just call the convention an "estrogen fest" like Christie Hoope of the Dallas Morning News did?

Stereotyping all women who supported Clinton as irrationally hormone afflicted Medea types does not help.

And when did a man who lost a political contest by a hair ever behave like Ghalhad? Are you implying that a man in Clinton's situation wouldn't let his supporters cause a bit of a ruckus? Because the XY thing helps them see the true purpose of political office which is to uphold the constitution and work for the will of all the people for betterment of our great nation?

Give me a break. People go into politics for themselves and they stay because they like the perks and the power.

When it comes down to it there is no difference between Clinton and Obama on issues - not really, so the choice becomes one of preference. Obama's followers would have been no better had the primaries gone the other way.

We live in highly charged times. Society teaches us to want what we want and everyone else be damned. This is not a male/female thing. This is our spoiled brat universe.

[Nicholas Paredes]

Calling politicians slimy, is like calling poker players liars. But, I trust Obama enough to at least believe that he won't be getting blow jobs on the side. When's the last time one could say that, even with the current crop? Where in the world is Vicki? You may wish that a Democrat were not coming to clean up the room after monkey boy and his playmates leave the room, but I call anybody who voted for him an idiot, so YMMV of course. But, I still think you're idiots, so TFB.

I'm not nearly the doomer, so to speak, that many are about the CFN, but admittedly we're in for tough times, and frankly large swaths of population are going to become compost. That may include me! I'm a friggin' Buddhist prone to drinking and getting into scuffles, so why should I care?

Banks may come, and banks may go. Next time around let's actually create a decent culture where inane things like education and integrity are valued over bravado and money. Although, I was at a party with a bunch of traders on Saturday, and they are not hurting that bad apparently. Future trophy wives gathered around the sushi chef... Twas a sight to behold.

[Moondog]

DanaJ: You are right about Jim's view of Obama and the Dumocrats. And if they can't win given the current circumstances: war criminals running the country, invading the wrong country [and not getting it done in Afghanistan either], violations of the Constitution, notably shredding the Bill of Rights, and, oh yeah, the economy [stupid],which by itself should be enough for a definitive Obama victory. Maybe Biden will prove to be an effective rottweiler, but there is a strong possibility of a McBane win. And why not? Doesn't dumocracy give the people the kind of government they deserve? Perhaps Obama is a last faint hope, if he's secretly planning to make some big changes, demand some real sacrifice, and believes that "less is more." I'm not rolling over yet, either, montysano, so I'll suspend by cynical expectations and cling to a naive hope [while I check off another day on that Mayan calendar].

[Bunn Bunn]

Don’ worry dave… I might be crackin’ a fat, but I’m not cracking the crock! And I’m not drinking my delicious water (ph of 7 ) from some gaudy Mexican ceramic drinking bowl either.

http://www.iconocast.com/News_Files/ZZZNewsP0_XX/News9A.htm

“In 1991, the FDA again tightened lead standards for ceramic glazes. The limits vary, depending on the size and type of ceramic piece. The standards are tightest for cups, mugs and pitchers, the items most likely to be used repeatedly or used to hold liquids most likely to cause lead leaching. After holding a vinegar solution for 24 hours, these items can leach no more than 0.5 of a part of lead per million parts of the liquid. That is a drastic reduction from the previous standard, which allowed as many as 5 parts per million.

When the Food and Drug Administration tested 111 lots of domestic ceramics in 1991, all complied with the regulations. The results were not as comforting, though, for imported pieces. Of 9,711 lots tested, 2,529 violated the standard. The FDA says Japan and Britain have good quality-control procedures, but in many countries, especially Mexico, ceramics manufacture is a home-based business with few assurances of quality.”

[Movenonup]

Off topic @ Nicholas

"I'm a friggin' Buddhist prone to drinking and getting into scuffles," Nick-

add in cycling and the fact that you seem to be disillusioned with the slow, go nowhere pace of community activism, and I am pretty sure I am married to your clone.

Me and your clone are pretty happy. I enjoy you. Make sure your heart stays open. Not all future trophy wives or harpies are necessarily as they appear.

I think that is my advice to The Kunstlermeister too. I know, ya'll didn't Clusterfucking ask.

Good luck.

[LaughingAsRomeWasBurningDown]

Hope. Gotta hang on to that, however thin... And as cynical as I may be, even I recognize for sure what we'd be getting with McCain, and think the only chance for any change is with Obama.

And for all your "lesser of two evils" folks, by the time it gets to a presidential level, that's probably as good as it gets. If you want to have more than that, then it would have to start locally, and most folks, myself included, are not involved that much in their county or city government activities.

[Empedocles]

Democrats - centralized power; Kunstler - localization

Democrats - international intervention; Kunstler - non-interventionist

Democrats - increase spending; Kunstler - get out of debt.

Democrats - free trade; Kunstler - protectionist

Democrats - increase oil-drilling; Kunstler - save for future generations

Why is Kunstler a Democrat again?

[Moondog]

I am on the Kunstler side of every issue Empedocles catalogued. But I will vote Democrat anyway, since the Repugnantcans are adamantly in favor of the [Mc]same policies but with such passionate intensity and determination [Cheney's demonic, sniggering smile appears].

[LaughingAsRomeWasBurningDown]

Empedocles, maybe do the same list with Republican "values" and see if you can figger it out for yourself.

[Merlot Winters]

politically i'm green anarchist, but i also understand that you don't become president of the u.s. by waging a progressive-style campaign. When you get your party's nomination, you must tack to the center if you want to get elected.

The public has been bruised but not bloodied by current economic events. They will not go with someone left or right of center anymore than they went for Teddy Roosevelt when he ran Bull Moose. Even FDR had to promise Southern Democrats not to end apartheid to get elected. So i'm not going to get all upset if Obama has to look centrist. This only means that he's serious about becoming president.
One other thought is that perhaps in the long run McCain gets in, economy collapses, dogs and cats begin living together, and we can get a REAL progressive in '12. Unfortunately, the American public seems quite willing to vote against economic interest, so i'm not getting my hopes up. Perhaps what we would get instead would be the kind of "small r" revolution in our way of life that Mr. Kunstler seems to advocate.

[montysano]

Republicans: authoritarian power;
Republicans: premptive war;
Republicans: wreck the economy, leave the middle class holding the bill;
Republicans: corporatism that approaches fascism;
Republicans: wreck the environment, future generations can go pound sand.

Hope that helps, Empedocles.

I wish I were as sanguine about the election as JHK is ("he (McCain) really doesn't have snowball's chance in hell of winning this election "). McPOW is the lamest candidate in memory, but still polls dead even. We may, yet again, get the government we deserve.