What Did You Expect?

 

That repeats some of the points I made last Friday, but I went farther than Prof Krugman. The Professor is rather cautious, not wanting to be wrong, which is OK in academia. The rest of us have to live with the consequences of economic misfeasance and even malfeasance.

The high priests of finance have been running around praising the Bandit and giving him money while having a hard time disguising the drooling around their mouths. That's because the Bandit has been trying hard to organize another robbery, this time the biggest ever: privatizing Social Security. Wall St stands to make trillions in fees for a long time, if the Bandit's plan succeeds. But, woe is them: almost every day there is another story about ordinary people seeing through this scam, and refusing to open their pocketbooks. There's a good chance this robbery just won't happen. Another losing investment for Wall St. (Did you ever wonder why the financial "experts" are so bad at making money for you?)

Meanwhile, oil and gas prices have continued to climb. The Saudis - ever accommodating - have been pumping up more and more oil. So this week the market is flooded with oil. There's just one (ha!) problem with this: there's only so much oil. (There's a second problem, too, you can only slurp it up so fast.) Temporary increases in oil supply are just that, TEMPORARY. The fact is that oil prices are going to go up, up, up because there's not enough for everyone who wants it. The further fact is that every barrel we get from the Saudis transfers a little more power to the Wahhabbis and other Islamic fundamentalists. We do know that, don't we?

Irony: The Bandit says he sent his gang into Iraq to get rid of a monster, but the more important goal was to control the world's 2^nd largest supply of oil (euphemistically described as insuring an Iraq friendly to the United States). But, who controls who?

As Prof Krugman points out, we could have started conservation programs. We could have invested in alternative energy. (Remember, Marlon Brando's "I could've been somebody!") But, the Bandit and his henchmen aren't really interested in that; they owe their existence to oil. While the Bandit's gang profits mightily from drilling and selling, they distract your attention by promising clean, hydrogen powered cars someday. (Maybe this really is a rerun of On the Waterfront.)

The saddest thing about whatever is going on is its repetitive nature. Whenever conservatives gain power, they generally ruin the economy. That fact certainly puts the lie to their claim that, as business-oriented people, they know how to run the economy. (Guess what? The government is not a business, and neither is "the economy.") This ignores a small difference between running a business and running the economy: private business occurs within an economic context. That famous Charlie Wilson saying, "What's good for GM is good for the country," just doesn't work. It amounts to the tail wagging the dog. In order to have a good economy, one has to have an overview of, and a detachment from, all sectors and how they interact. This is typically what conservatives lack - an organized understanding of the whole and an absence of conflicts of interest - which results in various disasters. You can make things very good for ENRON and other Bandit friends, while not necessarily benefitting the country. (Shouldn't this be obvious?)

To escape from their ignorance, conservatives plead the "invisible hand" and "markets," other names for the immanence of their gods. The idea is that invisible forces will lead to the correct result, because "the market" is always right. The fact that markets are highly emotional and erratic (demonstration: the last few weeks) is ignored, as market fundamentalists believe that all information is known to market players, and (amazingly) market players are rational. The market is a statistical summing of various rational opinions with respect to all known factors. That's what they believe.

Mandelbrot's (mis)Behavior of Markets makes it clear that none of those ultra-capitalist assumptions are true. His fractals are a better guide to market behavior, which implies that chaos, not reason, rules. Thus, the "invisible hand" and the like amount to an excuse for the failure of conservative ideas and explanations.

What's the answer to all this?

1. Keep your eye on the facts, ignore the BS.
2. Dump the Bandit, the Cockroach, their gangs and their ilk.
3. Make sure you know what you are doing.

Solutions are not that hard, but they do require thought and work.