Sunday, July 15, 2007

The End Is Near

You have to be worried about the future when all of the signs are pointing to an inevitable stumble, if not an outright collapse. Almost anywhere you look, you can see the evidence.

Example: Despite war, global terrorism, and a "correction" being underway in the housing market, the Dow and the S&P 500 both hit record highs this week. According to Bloomberg News, the "unprecedented pace of takeovers and stock buybacks" drove the stock markets.

Example: The auction house Christie's has seen its sales jump 30 percent this year, largely on the strength of outlandish prices for art -- such as the $71 million paid for an Andy Warhol car-crash.

Example: Like rats abandoning a sinking ship, private equity funds are cashing out and paying prodigious sums to their already absurdly wealthy managers. Blackstone's Stephen Schwarzman alone plans to take home over $7 billion. Fortunately, he has an 11,000 square foot Palm Beach mansion to take it to, so most of it should fit.

Bear in mind that this -- ahem -- conspicuous consumption is taking place while the nation is at war. Sorry, I know it's easy to forget when you are being distracted by Paris Hilton's latest outrage, but 3600 Americans have died in Iraq, most of them since Vietnam-War-dodging Dubya announced "Mission Accomplished" in 2003.

Example: In its recent analysis of progress in Iraq, the Administration's best spin-meisters could only muster the gumption to lie about 8 out of 18 "benchmarks." In other words, at Bush and Cheney's dishonest best they can only pretend that Iraq is a semi-disaster with no end in sight.

Example: No matter how bad you think things may be today, they can always get worse tomorrow. Following the Washington maxim of "when you find yourself in a hole, dig faster" the US Senate recently voted 97-0 in support of a resolution warning Iran that we would not tolerate their interference with our continued occupation of their next-door neighbor (Iraq, not Iran's eastern neighbor Afghanistan where we also have troops).

Rather like former Clinton advisor Robert Reich, one is always in danger of predicting 7 out of the last 2 recessions when trying to guess what the future holds. In other words, the vast size of the US economy has an enormous reserve capacity and the modern social safety net mitigates many of the harshest effects of capitalism. So a few bad signs are not automatic harbingers of doom.

Nevertheless, there are a lot of worrisome facts available to those who are paying attention. And if doom-and-gloom is NOT in our future, if sailing is so smooth that we can afford to spend over $100 billion per year imposing democracy on reluctant Middle Easterners, why can't America do a better job of taking care of its own citizens? What's the excuse for our failure to institute universal healthcare, for example? Apparently, as long as the top rung of the economic ladder is doing well, the rest of us can go to hell.

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