A whole cluster of thoughts accompanying this one, spanning the spectrum from rational to rather deranged:
First off, it is amusing (in a black humor sort of way) to watch the media react to the initial 5000 point drop as being merely a bump in the road, and to hyperventilate as we continue to settle downwards. This is the reverse of what we saw as recently as two years ago, where every good day was trumpeted from the battlements and every bad day was quietly forgotten.
The good news (such as it is) is that the same guys who were ignored when they said that things were going to get worse are now saying that things are going to get better. And they’re still being ignored.
Digging out the aluminum foil hat* for a moment, the origins of the present crisis seem to be birthed in decisions of four years ago. If you’ll remember, that was when there was a major push by the administration to put your social security funds into the market, to the point of declaring the re-election a mandate for just that kind of change. It was one of the few cases where the nation at large delivered a “hell no” to the admin, and they backed off.
But if they had, would the increase in liquidity keep the pot boiling, the bubble expanding, for a few critical months? Would the current disaster have been put off a year or two, making it someone else’s problems? (This is my gripe with term limitations – the planning is confined by how long you keep the job.) This assumes that the admin knew what it was doing (despite appearances) and saw the marketization of social security as the only way to keep it from falling in on their watch. They didn't get it, the roof fell in earlier than it should have, and they have to take the rap for it.
And here’s something else from the metallic chapeau department – Many (many) years ago, I was unemployed in the Reagan recession of the early eighties. It was a pretty nasty time in the US, but it was worse for Japan. In fact, Japan (which during the seventies was supposedly poised to eat our lunch) suddenly found itself crippled and has yet to regain its economic strength thirty years later.
Now, we’ve recently been faced with China as a rising power also threatening to eat our economic lunch. And with the sudden economic downturn, its manufacturing cities are emptying as everyone is going back to their family farms. The newly-built fiscal infrastructure, like Japan's two decades previous, may not recover.
Which leads the paranoid to ask - Is the current crisis a form of economic warfare? Is there still more going on behind the scenes here?
Just some thoughts,
*”Tinfoil Hat”, while tripping off the tongue, doesn’t make much sense. No one uses tinfoil anymore, not even in gum wrappers (Which would be hard to make a hat from, anyway). That stuff you’re wrapping leftovers with? Aluminum foil, which replaced tin foil in its consumer niche sometime in the early part of the last century. The word survives, while the product does not.
Passive voice: the good zombie rule - (I’ll admit it’s not a rule so much as a test, but I couldn’t pass up that opportunity. Live with it.) First, an apology to all my readers for not having w...
17 hours ago