Monday, February 17, 2014

Welcome to the new "normal"

For years, now, Americans have yearned for a return to "normal." They had a few bad breaks, one or two traumatic experiences, these have been hard times, indeed, for most Americans. They'll get through it, like they always have, and things will return to "normal."

Just wait.  And see.

And wait.

But what Americans remember as normal, never was. Americans have been living in abnormal times since the1970's, and didn't even know it.  Americans are wishing now for a return to very abnormal conditions.  For conditions that are unlikely ever to exist again.

For decades, it seemed perfectly normal to most Americans that they consumed, voraciously and insatiably, while foreigners produced … and that they could spend everything they owned, and more, while foreigners saved all they could. Central banks encouraged the masses to consume; and the more they consumed, the poorer they got, but as long as they had someone else's money to spend, they didn't complain. The youth of the American Empire studied gender sensitivity at school; foreign kids studied engineering and science.

It wasn't long before competitors had more factories and those factories more modern, they had more savings, better-trained workers, they were building new energy systems and transportation systems ... their nations' infrastructures.  Then, the American Empire turned to a colossal conceit; that it could make its way in the world by financing things, rather than actually making them. Everyone could participate, making money off of money, instead of actually producing anything, anything at all, of value.  Gradually, the Anglo-Americans developed a value-subtracting society – financing, brokering, collateralizing, borrowing, flipping, consuming – all at the expense of real production.  Hey, America's traditional rivals, the Russians, recognized the symptoms: America's leadership was largely delusional, industrial capacity was largely archaic and dysfunctional, and the working class was largely broke ... the nation involved itself in two expensive foreign wars, and the neocons have been practically drooling over a third (Iran), maybe even a fourth (Syria).  Looked familiar to the Russians ... real familiar.  They've already been there; already done that.

By 2006, practically every transaction was tainted with swindle.  Fraud and deceit were part of the economy. Banks sold each other packages of bad debt, both the buyer and seller knew it was bad ... but if the buyer thought he could sell it at a profit, even if it was inherently worthless, he wanted in on the fraud.  They all knew that those CDO's were composed of mortgage contracts on houses sold to people who couldn't afford them, fraudulently rated Triple-A by the rating agencies, based on bogus formulas invented by Nobel-prizing winning economists. This all took place in a drunken frat party atmosphere created by central bankers, they were part of it.  After the collapse, the ruins are liquidated, picked over, and parceled out to the politically well-connected ... that is how the next collapse will end too; a consolidation of wealth in the hands of the corporatists, who will walk away from the damage they caused, and fewer Americans will have good-paying jobs; few Americans will have jobs of any kind.

What was the major result of the 2008 subprime mortgage market collapse?  The President of the United States gave them a parting gift before he left office, an enormous bank "bailout plan" in which large sums of money went to the perpetrators of the biggest (and most successful) scam of all time; that money being borrowed in the names of all American citizens.

Was any that "normal"?  Was that  the normal behavior of a healthy society?  Of course not.

Was it all planned to go down like this?  Sure it was.  Who pocketed the profits?  They laughed all the way to the bank.  At your expense, and mine.

Maybe you're one of them?  If so, congratulations ... you got away with it.  I wish I could afford a bottle of what you drink to celebrate.

And you'll probably get away with the next one, too, but don't count on it.  It worked once, fabulously, and it will probably work a second time. But it does not produce a stable system.  It is unsustainable.

Unsustainable, yes, but it is the new "normal" for Americans.  A society in which nearly all power and wealth (two sides of the same coin) are concentrated in the hands of an elite few; who decide things for all, who control through fear, an often-irrational fear, that makes Americans willing to trade every freedom, including the freedom to act independently, without government surveillance in their private lives, loves, and businesses.

That's the new "normal."  And Americans who are hoping for a return to a time they remember as better than all of this?  They're hoping for something that will never come their way again.

Since the 1970's, American productivity (the amount each worker contributed to the nation's GDP) has increased almost 100% (the increase was measured at 99% between 1971 and the beginning of the recession in 2007), but the average worker's salary went up just four percent; after taking inflation into consideration, there was no real increase in income for the average American worker during that entire time (35 years!).  Virtually all of the profits from the increase in American workers' productivity wasn't put back into the economy in the form of higher wages and salaries, or even capital investments. Most of it went into the pockets of corporatists/shareholders.  And much of it was put straight into non-productive artificially-contrived investment "instruments" ... stocks, derivatives, CDO's, risk swaps.  And it is happening again today.

And while Americans wait for a change that's never coming without a fight; those who are willing to fight for freedom, for justice and for a more equitable society are increasingly living in other countries.  Americans are acquiring a reputation for passivity, for weakness.  There's a cost associated with that.

In their defense, though,  I would like to say the options available in the US for the corporatists to invest are severely limited. They are essentially forced to invest that money in non-productive ways, which is causing the markets for those speculative instruments to soar.  And take a look, the market for derivative securities is booming again.  So, don't blame these market investors, ok, for the next bubble burst  Even though they will be the only ones to profit from it, even though it will further concentrate America's wealth in the hands of a tiny elite plutocracy, it's just the way things are ... in the new "normal."

And if you work for a living, that's your problem. No one in a position of power is on your side.

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The New "Normal"