Friday, May 15, 2009
There Will Be No Recovery
by James West, MidasLetter.com | May 15, 2009
All the glad-handing, back-slapping self-congratulatory accolades the Obama administration and Wall Street are heaping upon themselves in the press is scant comfort for the vast majority of citizens now unemployed and of no fixed address. For them, this economic crisis isn’t so much a temporary crisis as a permanent redistribution of wealth and living standards representative of a downgrade in the quality of life.
A dispassionate eye, equitably minded, would regard the current gross imbalance among haves and have nots as a simple case of injustice, easily rectified. Those travelling daily in jets and Escalades leveraged the savings and credit ratings of the common people to agglomerate assets onto their own balance sheets to satisfy a sense of entitlement derived from an overpriced education.
Simply go back into all the family trusts and holdings of the top 10% of the population, see who made what from which leveraged revenue scheme (or scam, as the case should be), and liquidate the assets of each to the benefit of every impoverished bank account until the distribution of wealth and purchasing power is restored to something approaching equilibrium.
I can hear the howls of protest from the neo-conservative right already, accusations of socialism and communism manifest in their strident shouts. But this nation must surely be growing tired of a financial elite who wave the democracy banner when their hand is in your pocket, and the socialist banner when their little game of marbles goes bust and they stand crying and wailing for government help. Lets reach up high into the financial food chain and pull down a little manna from heaven.
The feeble feints towards the regulation of derivatives is already transparently disingenuous in the preservation of non-standardized privately negotiated contracts from the balancing forces of clearing houses. These are the very contracts that represent the highest dollar figures in the hundreds of trillions of dollars worth of contracts leaning hard over the economy’s tattered remains still. Lets quit faking regulation, and either drop the charade or regulate everything equitably.
If I overuse the term “equitably” in this rant, please forgive me, but that is the commodity most impaired by the government-banking-media mafia’s perennial raids on the American pantry. Equity is the foundation of, if not the spirit, then at least the ideals behind the Constitution. There will be no recovery until that basic premise is liberated from the dungeon under the White House into which it disappeared decades ago.
The terms “equity”, “equitable”, and “equality”, though having different meanings under various subjective subsets, are all derived from a concept embracing fairness.
According to the definition at InvestorWords.com, equity is:
Ownership interest in a corporation in the form of common stock or preferred stock. It also refers to total assets minus total liabilities, in which case it is also referred to as shareholder's equity or net worth or book value. In real estate, it is the difference between what a property is worth and what the owner owes against that property (i.e. the difference between the house value and the remaining mortgage or loan payments on a house). In the context of a futures trading account, it is the value of the securities in the account, assuming that the account is liquidated at the going price. In the context of a brokerage account, it is the net value of the account, i.e. the value of securities in the account less any margin requirements.
Ownership interest in a corporation in the form of common stock or preferred stock.
Total assets minus total liabilities; here also called shareholder's equity or net worth or book value.
The value of a property minus the owner's outstanding mortgage balance.
Fairness in law.”
Another decree from the dispassionate eye equitably minded would be to forbid the foreclosure upon any home by an institution who received a bailout under the TARP, TALF, or any other anagrammed government financial rescue program. That would be fair, and equitable. Which, unfortunately, considering the incarceration of those twin concepts, is almost guaranteed not to happen.
Is it coincidental that the “recovery” apparent in inexplicable stock index exuberance happened to coincide with the expiration of the majority of moratoriums on foreclosures? Was the happy countenance of a healthy economy required to distract the nation from the other face whose fangs are now rotating into full view?
The idea of revolution keeps popping up, albeit intermittently, in the fringe blogosphere. I wonder just how far the disconnect goes between what the government-banking-media mafia thinks the public will swallow without complaint, versus the grave and solemn outrage dangerously smoldering in the hearts and minds of its victims that is the reality that brings that idea closer to an explosive existence?
This is the real and stark potential future for the United States. With crime on the rise in virtually all sectors, and the population already armed to the teeth, there is a fine line on the horizon that this organized crime gang seems intent on crossing.
The basic requirement of all humanity is food, shelter, and gainful employment. Historically, armed revolutions are ignited when those basic elements disappear from the daily lives of a majority of the population, such that most have nothing better to do than steal, beg, or roll over and die. When enough of that despair permeates any portion of humanity, there is an organic, deeply-rooted fury that, expressed collectively, has never failed to topple governments and rewrite the world order.
Proponents of globalization point to the fact that there has never been a longer period in the history of the planet where more people have enjoyed a peaceful and prosperous existence. That may be true, but one must question if that is because we have been living under a system that is for the most part fair and equitable, or have we just so thoroughly mastered the arts of manipulation and delusion through the offices of mass media that there has also never been a time where such astonishingly massive concentrations of personal wealth have accrued to such a proportionate few in the same time span?
The larger question in terms of a recovery is exactly what must we recover? The mafia most clearly wants us to believe that a return to over-leveraged and exuberant economic growth is the priority underlying the idea of recovery. I opine that there is something far more valuable that needs to be recovered, and issues economic are puny in comparison. For without the recovery of equity, there can be no recovery.
Copyright © 2009 James West