Favorite Quotes

CURRENT FAVORITE QUOTES

"The most fundamental form of human stupidity is forgetting what we were trying to do in the first place"

"Party like its 1929"

Thursday, December 23, 2010

Black Swans, Regular Swans and the blindingly obvious problems coming soon to an economy near you

       I have been reading recently about the beginnings of the First and Second World Wars. In the course of this I noticed a distinct difference in the attitude of the political actors.

       Preceding the outbreak of the Great War everyong was certain that  war could not occur, that there were too many economic ties and political pathways to permit the explosion that the nations of Europe had spent the past decades building and traning for. Who would want war? Populations were growing but wealth was growing faster, science and technology were providing better ways to live and more leisure time for almost everybody and most of the continent was ruled by royal families that were closely related. Then Mr. Princip got lucky and managed to kill the Archduke of Austria-Hungary and, from that act, millions died. Later historians refer to the "spark that lit the powder-keg" but many people at the time felt that any war, if it happened at all, would be a local affair like the Franco-Prussian war rather than an earth-shaking event that is still sending tremblors through the affairs of men.

     Before the Second World War (or as it should be called The Great War, Part Two) almost everybody, with the possible exception of Neville Chamberlain, could see the writing on the wall. Economic turmoil had allowed the rise of militaristic dictators and crippled the funding and will of the remaining democratic nation's militaries. Insane ideologies took advantage of the despair of the people and, through a wily combination of promises and brutal cruelty, took control of  Italy, Germany and Russia. Treaties that would have been easily enforced were allowed to lapse for lack of will and friendly republics were sacrificed by cowardly politicians to avoid hard decisions. Appeasement of the power-mad and the opportunists worked about as well as "allowing" a hungry shark to eat just one of your feet.Hundreds of millions died before the last of the mad Socialist tyrannies collapsed,  either in war or as the result of actions taken by their own governments.

    Much has been written these days about Black Swans, the "..unknown unknowns.." unforseen events that can shake the world. I find it unproductive to dwell on these as they are by their very nature imponderable and, as such, impossible to prepare for.

      The White Swans, the "..known unkowns.." are easier to contemplate and thus prepare for at the national level. The problem  is that it can be difficult for the average person to prepare for an Iranian nuclear test or a NORK attack on Japan. The sort of thing that could be easiely predicted and assigned a probability, it is largely a question of timing. Aside from making accomodations for the fallout of such an event there is dammned little that I can do to stop them from happening. These are the types of things should have been obvious to the people before the beginning of the Great War but were missed. Look around the world today, there are lots of loaded guns pointing every which way and some pretty itchy fingers resting on the triggers.


    The category that I would add is the Blindingly Obvious Events, these are the ones that everybody saw in the run-up to the Second World War but did nothing to avert. In our world these would the things that people should be in the streets with pitchforks and torches about. Instead they watch American Idol and The View, go figure.

A short list would include;

   1. The sell-out of the taxpayers to prop up banks that should have been allowed to collapse. Decades from now people will look back and shake their heads wondering how this happened, how did the citizens of the US permit the bankers to bury themselves in bad debt and then get the taxpayer to pick up the tab. The short answer is corrupt politicians, the long answer is corrupt politicians. Bankers and poloitcos should be dangling from lamp posts all over DC and NYC  for the crimes they have commited against the next few generation of taxpayers.

   2. The destruction of the US dollar as the world's Reserve Currency. This goes back to Tricky Dick Nixon and dropping the Gold Standard but has accelerated rapidly under the reign of Printing Press Ben and the Almighty Fed's POMO. He has started a race to the bottom wherein he is trying to inflate away the recession and hide the crimes of the Banksters in a mountain of dollars. His efforts to inflate the US economy have started a currency war, hopefully we can avoid a shooting war.

   3. Useless leadership(?) I am not sure how to put it; useless, corrupt, stupid, incompetent, ideological or traitorous. Perhaps all of the above. Leave it to say that at the Federal, State and most municipal levels the people entrusted to run the joint have dropped the ball. These are the sort of people that would die in a house fire because they couldn't make up their mind which door to run out. And we elected (most of) them. From the Oval Office down to the local city council the leaders were too stupid to see what was coming or frankly didn't give a damn, either way they have done enormous harm. Out a sense of commitment to their stupidity they think the right  answer to our problems is to implement the same old thing at a larger scale.

   4. I won't make any friends with this one but; We are stupid, the American people are idiots. For three decades we have been too busy living in a dream-world to see that the "Age of Aquarius" isn't happening. I think most of the Boomers (who have been running the place for a couple of decades now) should have gone a little easier on the drugs back in the day. They didn't save enough, they elected politicans that wasted our birthright in every imaginable way, they lacked the commitment and nerve to stop problems in the beginning stages, they didn't demand that Social Security be fixed back in the Eighties when they should have (now they want to enslave my kids so they can continue to live the "high life"). We, as a nation, are more concerned with sports, TV and Hollywood gossip than we are with good governement, the economy or foreign relations. We are idiots, and, like the fool who refuses to learn when he gets burned, we keep sticking our hand into the fire and wondering why it hurts. As a nation we need to "man-up" and take responsibility for what is going on around us and in our own lives.

   5. The world is in worse shape than we are, the neighborhood is going to heck and the police just went on strike. The current Congress and Resident have pretty much given up on anything that pretends to be foreign policy (aside from blowing up people with missles fired by robots). We have withdrawn from the world, if not literally at least figuartively. The good old USA is playing hooky. The Euro is in meltdown, China is heading into dangerous inflationary waters and the rest of the BRICs are trying to figure out how to run an export economy when nobody is buying.

  6. Too many crazy guys are playing with/ building  dangerous toys. Let's face there are some people that you really wouldn't trust with a loaded pistol, why do we tolerate them running countries that are trying to build atomic weapons?  If we can hit a terrorist with a missle from forty miles away why can't we nail these bozos? Screw that "No Asassinations" rule, it is OK for regular folks to die because the politicos can't get along so let's make it fair; the first target is the politicos. Heck, they wanted the job, I just wanted to go home and have a beer. I am willing to bet my next paycheck that Lil Kim would behave himself if he thought (even for a second) that we would drop a JDAM on his crazy little noggin for pissing us off. That goes double for all those "tough guys" that are less insane than Kim.


   These problems could be largely dealt with if we as a poeple would accept some responsiblity. We have to be willing to take the pain of financial retrenchment to purge our banking sytem of all the bad loans and "free" money that clog it. We have to elect leaders that who will address the root cause of our problems rather than trying to nibble away at the bottom of the threat structure (think about it, if we took out Kim Sung Il the other nations would protest but secretly they would rejoice). We have to begin to take seriously the old moniker "Land of Opportunity", not the opportunity to suck at the government teat, the opportunity to make something of OURSELVES. Remove the crippling government restrictions that cause business to move overseas, educate our kids in productive areas of learning instead of "feel good" nonsense and take control of our political representatives.

     Let's get the Blinding Obvious taken care of so when that Black Swan does arrive we will have the energy and resources to solve that problem as well.

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